HBC, the parent company of Saks Fifth Avenue, announced on Thursday that it will acquire luxury department-store chain Neiman Marcus for $2.65 billion.

This strategic acquisition aims to enhance the companies' negotiating power with vendors and improve cost management capabilities.

The acquisition is timely as luxury retailers face a slowdown in demand due to the economic pressures of high interest rates and inflation, which have led customers to tighten their budgets.

This trend marks a shift from the surge in luxury retail spending witnessed post-pandemic.

In response to the acquisition, HBC revealed plans to establish Saks Global, a new entity that will encompass Saks Fifth Avenue, Neiman Marcus, and other luxury retail and real estate assets.

This consolidation is seen as a move to strengthen their market position in a challenging economic environment.

Neiman Marcus, which filed for bankruptcy protection in 2020 due to significant disruptions from the pandemic, is renowned for its high-end offerings including designer dresses, shoes, and handbags, primarily serving affluent consumers.