Neiman Marcus Turns Down $3 Billion Offer From Saks

[Alpha8472]

Neiman Marcus has rejected a $3 billion dollar purchase offer from Saks. The two companies will continue to negotiate a possible merger in 2024. This merger may trigger antitrust scrutiny.

https://chainstoreage.com/neiman-marcus ... offer-saks

[ClownLoach]

Neiman Marcus has rejected a $3 billion dollar purchase offer from Saks. The two companies will continue to negotiate a possible merger in 2024. This merger may trigger antitrust scrutiny.

https://chainstoreage.com/neiman-marcus ... offer-saks

Antitrust scrutiny? The entire damned department store industry combined now represents LESS THAN 1% OF RETAIL SALES. If they all combined into one company it would still be meaningless. What is the problem here? Price gouging millionaire and billionaire customers on their luxury goods purchases? My gosh, they could close a store or two! Then where will these poor people buy their Louis Vuitton bags? They might have to walk all the way across the mall to the actual Louis Vuitton store! How will those poor people ever recover? And who are they going to divest overlaps to? Sears? Lord & Taylor? Big Lots? C&S? JCPenney?

Is this some kind of joke?

This is why I decided if there's one thing worse than these mergers, it's the FTC and Justice Dept. meddling with them. Make a decision! If you think the merger is legitimately damaging to the marketplace then block the deal period. If not then just let it happen. Don't get in the middle, period! I'm getting tired of the end results of their pathetic attempts to "correct" these deals with badly designed divestiture programs. After the Haggen mess and seeing what's likely to happen with C&S which will be worth more dead than alive on day one after they acquire these Krogersons stores, I actually would rather let the businesses manage the process like 7-Eleven did with Speedway.

[jamcool]

I don’t think there have been any Speedways converted to 7-11s yet.

[ClownLoach]

I don’t think there have been any Speedways converted to 7-11s yet.

The point being they did an excellent job of selling off overlapping stores on their own, all are still open and thriving under competition ownership. If anything, where in doubt they sold stores that they could have gotten away with operating (sometimes creating the oddity of a Jackson's Shell across the street from a Jackson's Chevron). I don't like 7-Eleven but I don't have to shop there and they didn't wipe out competition at all.

[HCal]

Antitrust scrutiny? The entire damned department store industry combined now represents LESS THAN 1% OF RETAIL SALES. If they all combined into one company it would still be meaningless. What is the problem here? Price gouging millionaire and billionaire customers on their luxury goods purchases? My gosh, they could close a store or two! Then where will these poor people buy their Louis Vuitton bags? They might have to walk all the way across the mall to the actual Louis Vuitton store! How will those poor people ever recover? And who are they going to divest overlaps to? Sears? Lord & Taylor? Big Lots? C&S? JCPenney?

Is this some kind of joke?

This is why I decided if there's one thing worse than these mergers, it's the FTC and Justice Dept. meddling with them. Make a decision! If you think the merger is legitimately damaging to the marketplace then block the deal period. If not then just let it happen. Don't get in the middle, period! I'm getting tired of the end results of their pathetic attempts to "correct" these deals with badly designed divestiture programs. After the Haggen mess and seeing what's likely to happen with C&S which will be worth more dead than alive on day one after they acquire these Krogersons stores, I actually would rather let the businesses manage the process like 7-Eleven did with Speedway.

The government can't just "block" a deal, they have to ask a federal court to do so. Currently, the federal courts have been stacked with "pro-business" GOP appointees who don't really care about consumers or workers, and are likely to allow mergers to go through. Therefore, the government has to settle for what it can get, which is usually some divestitures to at least soften the blow.

Antitrust cases are evaluated in the context of a particular market. A merger should not create a monopoly in a given market, even if that market is only 1% of all retail sales. I agree that it's absurd, but unfortunately common sense isn't a factor in these cases.

[ClownLoach]

Antitrust scrutiny? The entire damned department store industry combined now represents LESS THAN 1% OF RETAIL SALES. If they all combined into one company it would still be meaningless. What is the problem here? Price gouging millionaire and billionaire customers on their luxury goods purchases? My gosh, they could close a store or two! Then where will these poor people buy their Louis Vuitton bags? They might have to walk all the way across the mall to the actual Louis Vuitton store! How will those poor people ever recover? And who are they going to divest overlaps to? Sears? Lord & Taylor? Big Lots? C&S? JCPenney?

Is this some kind of joke?

This is why I decided if there's one thing worse than these mergers, it's the FTC and Justice Dept. meddling with them. Make a decision! If you think the merger is legitimately damaging to the marketplace then block the deal period. If not then just let it happen. Don't get in the middle, period! I'm getting tired of the end results of their pathetic attempts to "correct" these deals with badly designed divestiture programs. After the Haggen mess and seeing what's likely to happen with C&S which will be worth more dead than alive on day one after they acquire these Krogersons stores, I actually would rather let the businesses manage the process like 7-Eleven did with Speedway.

The government can't just "block" a deal, they have to ask a federal court to do so. Currently, the federal courts have been stacked with "pro-business" GOP appointees who don't really care about consumers or workers, and are likely to allow mergers to go through. Therefore, the government has to settle for what it can get, which is usually some divestitures to at least soften the blow.

Antitrust cases are evaluated in the context of a particular market. A merger should not create a monopoly in a given market, even if that market is only 1% of all retail sales. I agree that it's absurd, but unfortunately common sense isn't a factor in these cases.

The entire point of the department store market is its failure: it's a store that sells everything that others do all under one roof for convenience. A concept that screams obsolescence in the age of the internet. Hence nobody could ever acquire any significant dominance in the industry ever again. They absolutely still have the power to stop mergers through the various administrative means like the courts since they have the ability to demand so many changes that the merger becomes a fruitless exercise hence it is blocked. There is no store to divest to here as nobody's opening department stores, only closing them. Dying industries consolidate as they disappear, so no reason to stop them from combining.

[HCal]

The entire point of the department store market is its failure: it's a store that sells everything that others do all under one roof for convenience. A concept that screams obsolescence in the age of the internet. Hence nobody could ever acquire any significant dominance in the industry ever again. They absolutely still have the power to stop mergers through the various administrative means like the courts since they have the ability to demand so many changes that the merger becomes a fruitless exercise hence it is blocked. There is no store to divest to here as nobody's opening department stores, only closing them. Dying industries consolidate as they disappear, so no reason to stop them from combining.

The government is currently updating the merger guidelines, you can see the new proposed version here if you're interested: https://www.justice.gov/d9/2023-07/2023 ... ines_0.pdf The section on market definition starts on page 29.

I think it would be very difficult to argue that Walmart or eBay is part of the same market as Neiman Marcus under these guidelines.

Note that there is no consideration given to the size of the market or its trajectory of growth/shrinkage.

[storewanderer]

Antitrust scrutiny? The entire damned department store industry combined now represents LESS THAN 1% OF RETAIL SALES. If they all combined into one company it would still be meaningless. What is the problem here? Price gouging millionaire and billionaire customers on their luxury goods purchases? My gosh, they could close a store or two! Then where will these poor people buy their Louis Vuitton bags? They might have to walk all the way across the mall to the actual Louis Vuitton store! How will those poor people ever recover? And who are they going to divest overlaps to? Sears? Lord & Taylor? Big Lots? C&S? JCPenney?

Is this some kind of joke?

This is why I decided if there's one thing worse than these mergers, it's the FTC and Justice Dept. meddling with them. Make a decision! If you think the merger is legitimately damaging to the marketplace then block the deal period. If not then just let it happen. Don't get in the middle, period! I'm getting tired of the end results of their pathetic attempts to "correct" these deals with badly designed divestiture programs. After the Haggen mess and seeing what's likely to happen with C&S which will be worth more dead than alive on day one after they acquire these Krogersons stores, I actually would rather let the businesses manage the process like 7-Eleven did with Speedway.

The government can't just "block" a deal, they have to ask a federal court to do so. Currently, the federal courts have been stacked with "pro-business" GOP appointees who don't really care about consumers or workers, and are likely to allow mergers to go through. Therefore, the government has to settle for what it can get, which is usually some divestitures to at least soften the blow.

Antitrust cases are evaluated in the context of a particular market. A merger should not create a monopoly in a given market, even if that market is only 1% of all retail sales. I agree that it's absurd, but unfortunately common sense isn't a factor in these cases.

Nothing is "stacked" with GOP Federal Judges. They have a few judge majority but that is it.

FTC under its current leadership continues to lose high profile case after case they take to Federal Court for mergers. For instance they lost the case against Microsoft and it was heard by a Biden appointed judge in San Francisco named Jacqueline Corley.

They have won some smaller cases and going against what you say some cases they've won have been wins granted by GOP judges. They also take it as a win when mergers are abandoned which may or may not be due to their actions.

Also in the Meta case the FTC under its current leadership lost a District Judge was involved Edward Davila an Obama appointee.

So I don't know what you're talking about but it is democrat judges ruling against this current FTC leadership.

In the end only the consumers are losing due to this. The only thing partisan is the current FTC is not doing its job effectively or using its resources effectively. Who appointed that leadership? Maybe that issue is partisan. OR something.

And this current FTC will not doubt call Neiman and Saks calling things off a successful merger block... yet that merger wouldn't have been a competition issue. Unlike Kroger/Albertsons which is a huge competition issue.

Don't forget in 2021 this FTC was so pathetically weak or barely functioning that 711 and Speedway self selected their divests and merged without FTC approval. The the FTC "approved it" months later after the merger was done and stations had been divested months prior. I wonder how many other parties did that. That never would have happened from 2016-2020 given the microscope from the media and other parties on what all of the agencies were doing or weren't doing. That transaction was the sign of a completely non functioning and poorly led FTC.

This FTC still has at least another year to do some productive things but there were various merger blocks under the Trump FTC:
https://www.axios.com/2019/07/30/trump- ... ns-blocked

[veteran+]

Antitrust scrutiny? The entire damned department store industry combined now represents LESS THAN 1% OF RETAIL SALES. If they all combined into one company it would still be meaningless. What is the problem here? Price gouging millionaire and billionaire customers on their luxury goods purchases? My gosh, they could close a store or two! Then where will these poor people buy their Louis Vuitton bags? They might have to walk all the way across the mall to the actual Louis Vuitton store! How will those poor people ever recover? And who are they going to divest overlaps to? Sears? Lord & Taylor? Big Lots? C&S? JCPenney?

Is this some kind of joke?

This is why I decided if there's one thing worse than these mergers, it's the FTC and Justice Dept. meddling with them. Make a decision! If you think the merger is legitimately damaging to the marketplace then block the deal period. If not then just let it happen. Don't get in the middle, period! I'm getting tired of the end results of their pathetic attempts to "correct" these deals with badly designed divestiture programs. After the Haggen mess and seeing what's likely to happen with C&S which will be worth more dead than alive on day one after they acquire these Krogersons stores, I actually would rather let the businesses manage the process like 7-Eleven did with Speedway.

The government can't just "block" a deal, they have to ask a federal court to do so. Currently, the federal courts have been stacked with "pro-business" GOP appointees who don't really care about consumers or workers, and are likely to allow mergers to go through. Therefore, the government has to settle for what it can get, which is usually some divestitures to at least soften the blow.

Antitrust cases are evaluated in the context of a particular market. A merger should not create a monopoly in a given market, even if that market is only 1% of all retail sales. I agree that it's absurd, but unfortunately common sense isn't a factor in these cases.

Totally agree, writ large!

[ClownLoach]

The entire point of the department store market is its failure: it's a store that sells everything that others do all under one roof for convenience. A concept that screams obsolescence in the age of the internet. Hence nobody could ever acquire any significant dominance in the industry ever again. They absolutely still have the power to stop mergers through the various administrative means like the courts since they have the ability to demand so many changes that the merger becomes a fruitless exercise hence it is blocked. There is no store to divest to here as nobody's opening department stores, only closing them. Dying industries consolidate as they disappear, so no reason to stop them from combining.

The government is currently updating the merger guidelines, you can see the new proposed version here if you're interested: https://www.justice.gov/d9/2023-07/2023 ... ines_0.pdf The section on market definition starts on page 29.

I think it would be very difficult to argue that Walmart or eBay is part of the same market as Neiman Marcus under these guidelines.

Note that there is no consideration given to the size of the market or its trajectory of growth/shrinkage.

The trajectory of the market absolutely matters and these guidelines are immediately negated by bankruptcy asset sales. In other terms, declining businesses will combine one way or another. Neiman Marcus only emerged from bankruptcy a few years ago under creditor ownership and they could easily just push it into Chapter 11 again with an agreement by Saks to be the stalking horse bidder. So nobody really cares about the clueless Justice Dept. regulations as they still don't have an overreach into bankruptcy courts.

As far as a department store goes, it's a glorified marketplace of many brands under one roof where little to none of the merchandise is unique outside of house brands. Again the issue is that the business has disappeared with the rise of direct-to-customer vendor businesses where the customer gets a branded experience and has access to unique products and services. There isn't anything in a department store that can't be bought elsewhere. Heck even the alleged house brands aren't really that exclusive, all the Macy's house brands are sold at Hudson Bay in Canada.

I'd also argue that language about market size won't make it into the final version. Of course market size is relevant along with trajectory. Would the government intervene in the merger of DVD player manufacturers, or cordless telephone makers? Of course not, because they're businesses that are both niche and largely irrelevant to the majority of people. Without that language the FTC will wind up getting lost down rabbit holes everywhere.