Given that the luxury bodycare brand Tronque made its debut at Bergdorf Goodman just this past June and has only been sold in Neiman Marcus and Saks Fifth Avenue since 2022, founder Tanné Snowden is understandably extremely curious as to how the proposed acquisition of Neiman Marcus by Saks Fifth Avenue will play out. 

If the deal, which was announced in July and is valued at $2.65 billion, gets the green light from the Federal Trade Commission, the entire luxury retailscape could shift in unforeseen ways. Add in the fact that Amazon is involved, and the forecast gets even cloudier. 

The top concerns for brands sold in both Saks and Neiman Marcus? One, that there will be major store consolidation in overlapping markets, and two, that there could a potential homogeneity on the horizon, i.e., a watering down of the certain "je ne sais quoi" that makes each retailer unique.

“The merger, if approved by the FTC, may have an impact on luxury beauty brands but much of this depends on how Saks Global differentiates the two retailers,” says Shelley Kohan, Faculty Instructor in retail management at Syracuse University’s Whitman School of Management, using the new name conferred by Saks parent HBC. “If Saks and Neiman’s stay as we know them today, the global company may have to close some stores in duplicate markets. This would impact distribution of products in the stores that are closed and the ones that remain open.”

As for the homogeneity fears, it’s far too early to accurately make that prediction, either. 

“Saks may opt to differentiate the two nameplates, Saks and Neiman Marcus, with the latter focusing on higher tier luxury and Saks focusing on aspirational luxury and more contemporary brands,” Kohan notes. “A change in strategy and overall target market would impact the product lines carried and distributed.” 

For her part, Tronque’s Snowden believes that while there’s plenty of overlap between customer bases for the two stores, they each offer beauty seekers something different.

“Most customers shop at each retailer however, each store has its own very loyal and devoted customers,” Snowden notes. “I would say that with the merger, they would not want to change the differentiating factors which makes each retailer and their shopping experience so unique and special. Keeping their identity and not losing their distinct qualities will retain customer loyalty.”

As the co-founder of Luckyscent and the US distributor of Escentric Molecules, which is sold at both Saks and Neiman Marcus, Franco Wright also has a vested stake in seeing the two retailers retaining their own identities.

“The merger blends Neiman’s larger than life Dallas luxury with Saks’ East Coast sophistication,” says Wright. “Neiman Marcus exudes timeless elegance, while Saks offers high fashion and modern trends. Viewed through Escentric Molecules’ minimalist yet innovative fragrances, this union creates a dynamic retail experience that appeals to traditional and contemporary consumers.”

Clearly, customers who shop both retailers may be less than thrilled with excessive consolidation. 

“Both Neiman Marcus and Saks Fifth Avenue have a strong brand affinity and are beloved by their consumers,” says Elizabeth Lafontaine, Director of Research for location and foot traffic data software firm Placer.ai. “Placer’s data highlights that both brands have similar levels of visitor loyalty, with around 10% of visitors having visited either retailer two or more times in the first six months of this year. Our data also shows that a sample of malls, with both retailers as anchors, have grown foot traffic year over year throughout 2024, and shoppers at those malls often visit both retailers.”

Another possible outcome of the merger is the greatly increased leverage Saks Global could wield over vendors, particularly smaller ones. 

“The Saks Global company that will operate both nameplates, Saks and Neiman Marcus, will have stronger buying power,” notes Kohan, “thereby increasing the opportunity for the company to increase its gross profits and negotiate for brand distribution in its stores.” 

Marcel Hollerbach, Chief Innovation Officer and co-founder of Productsup, a cloud-based SaaS platform with a presence in more than 30 countries and clients including Sephora, L’Oréal, and Beiersdorf, agrees that Saks Global could gain leverage. “I think it’s viable, especially with a huge name like Amazon involved in the background,” he says. “The merger gives Saks and Neiman Marcus enormous buying power, while Amazon can help control the D2C channel.” 

Beyond providing financial backing, it remains to be seen exactly what role Amazon will play in the merger; according to the official announcement, Amazon said it was looking forward to working with the newly formed Saks Global “to innovate on behalf of customers and brands partners following the close” of the deal. 

And no, “brands partners” wasn’t a typo by the digital behemoth, which, through the recent addition of Clinique and Kiehl’s, has made considerable inroads in prestige beauty of late. 

“The idea of innovation is what jumps out at me from that statement, as a way to bring luxury retail to new and existing consumers in new ways,” says Lafontaine. “There’s also an element of learning from the success of luxury retailers to uncover new opportunities to engage shoppers, potentially with brands that haven’t been accessible in the past. This new chapter in luxury retail is likely to combine the best of the physical luxury experience we know today and the innovative nature of e-commerce.” 

Kohan predicts a “swift learning curve” for Amazon in the luxury fashion and beauty categories. 

“Amazon has failed in both physical retail and fashion apparel, and who better to learn the luxury markets in apparel and beauty than from Saks and Neiman Marcus,” posits Kohan. “Amazon’s alpha leader position in back-of-house infrastructure and distribution will be a keen asset for the combined proposed merger of Saks and Neiman Marcus. Amazon has established distribution models and fulfillment systems that lend itself well to the luxury beauty online marketplace.”

As Hollerbach points out, “Amazon plays in a lot of different lanes, but most people don’t associate luxury goods with the marketplace. Rather than try to build in this space from the ground up, the deal is an opportunity for Amazon to take a bigger push into high-end fashion. It can rely on the established names of luxury retail brands without having to invest in changing consumer perception of its own brand image.” 

No matter how it shakes out, Wright is optimistic. “Perhaps we could see luxury beauty take its next big step with Amazon’s reach,” he offers. Fingers crossed.