HBC, PARENT OF SAKS FIFTH AVENUE, TO ACQUIRE NEIMAN MARCUS GROUP FOR $2.65 BILLION AND ESTABLISH SAKS GLOBAL, A TECHNOLOGY-POWERED LUXURY RETAIL COMPANY

HBC, parent company of Saks Fifth Avenue, has entered into a definitive agreement to acquire Neiman Marcus Group (“NMG”), parent company of Neiman Marcus and Bergdorf Goodman, for a total enterprise value of $2.65 billion. Upon transaction close, HBC will establish Saks Global, a combination of world-class luxury retail and real estate assets, including Saks Fifth Avenue, Saks OFF 5TH, Neiman Marcus and Bergdorf Goodman, each of which will continue operations under their respective brands.

“We’re thrilled to take this step in bringing together these iconic luxury names, Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman,” said Richard Baker, HBC Executive Chairman and CEO. “For years, many in the industry have anticipated this transaction and the benefits it would drive for customers, partners and employees. This is an exciting time in luxury retail, with technological advancements creating new opportunities to redefine the customer experience, and we look forward to unlocking significant value for our customers, brand partners and employees.”

Compelling Strategic Rationale Benefiting Customers, Brands and Employees

Following the closing of the transaction, Saks Global will be well positioned to meet luxury consumers’ evolving expectations by:

Advancing the luxury shopping experience. Saks Global will invest in the luxury shopping experience, ensuring that customers can seamlessly access a broad fashion assortment through their channel of choice. Building on each retail brand’s history of innovation, Saks Global will drive further advancements in online functionality and fulfillment processes while providing greater access to merchandise.

Serving our customers through personalized interactions. High-touch, personalized experiences are fundamental to luxury shopping. Saks Global will bolster its technology-driven approach to personalization, leveraging first-party data and AI to create individualized online shopping experiences and empower sales associates to better serve customers.

Supporting established and emerging brands. For over 100 years, Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman have been deeply committed to helping luxury consumers discover the latest fashion from established and emerging designers. Through its improved ecommerce experience and well-located store fleet, Saks Global will help emerging and established brands reach their target customers.

Creating value for employees. Well positioned to succeed in the evolving and growing luxury industry, Saks Global will offer value and career development opportunities to employees.

Current Saks.com CEO Marc Metrick will become CEO of Saks Global, leading Saks Global’s retail and consumer businesses and driving the strategy to advance the luxury shopping experience.

“Saks has remained steadfast in our commitment to be at the forefront of luxury fashion, meeting customers not just where they are, but where they are going,” Mr. Metrick said. “We have respect and admiration for NMG and the contributions its teams have made in the company’s evolution. Together, with our ongoing focus on innovation, we are primed to drive growth for our brand partners and create career development opportunities for the incredible talent across Saks Global.”

Geoffroy van Raemdonck, Chief Executive Officer of Neiman Marcus Group, said, “This announcement is a testament to our team’s unwavering commitment to building rewarding customer relationships, driven by our differentiated business model. We believe this is a proactive choice in an evolving retail landscape that will create value for our customers and brand partners. Saks Fifth Avenue shares our passion for connecting customers with the world’s best luxury fashion. With our complementary capabilities and a new long-term capital structure, the combined group will position our iconic Neiman Marcus and Bergdorf Goodman brands for continued success.”

Saks Global

Upon closing of the transaction, Saks Global will comprise the Saks Fifth Avenue, Saks OFF 5TH, Neiman Marcus and Bergdorf Goodman brands, which will continue operations under their respective brand names.

Saks Global will also include HBC’s U.S. real estate assets and Neiman Marcus Group’s real estate assets, creating a $7 billion portfolio of well-located retail real estate assets in top-tier luxury shopping destinations. Ian Putnam, currently President and CEO of HBC Properties and Investments, will become CEO of Saks Global Properties and Investments, which will manage, maximize and enhance the company’s robust portfolio of assets. Both Mr. Metrick and Mr. Putnam will report to Mr. Baker, who will serve as Executive Chairman of Saks Global.

HBC’s Canadian Retail and Real Estate Assets

Upon closing of the transaction, HBC’s Canadian business will be recapitalized as a standalone entity, separate from Saks Global, with significantly reduced leverage and enhanced liquidity. HBC will continue to wholly own its Canadian retail and real estate assets, including Hudson’s Bay, which operates TheBay.com and the Hudson’s Bay network of stores, as well as a CAD$2 billion real estate portfolio. As a result, HBC’s Canadian business will be well positioned to support future growth, while continuing to serve its loyal Canadian customer base.

Transaction Details

The Boards of Directors of HBC and Neiman Marcus Group have approved the transaction. The transaction is subject to the receipt of required regulatory approvals, and other customary closing conditions. Until closing, the companies will continue to operate separately.

The purchase price is expected to be funded by a combination of equity capital from new and existing shareholders and debt facilities. Amazon will be an investor in and work with Saks Global to innovate on behalf of customers and brands partners following the close of the transaction. Rhône Capital, a transatlantic middle-market private equity firm and affiliated investment entities, will continue as the active lead investor in Saks Global. Global software investor, Insight Partners, an investor in Saks.com, will be a shareholder in the new company. Salesforce will also become an investor at closing.

HBC has secured a $1.15 billion fully committed term loan financing from investment funds and accounts managed by affiliates of Apollo, and a $2 billion fully committed revolving asset based loan facility from Bank of America (lead underwriter), Citigroup, Morgan Stanley, RBC Capital Markets, and Wells Fargo.

The transaction deleverages the combined enterprise while ensuring that Saks Global, on a pro forma basis, will have significant liquidity.

Advisors

M. Klein & Company is serving as the lead financial advisor and capital markets advisor to HBC on the acquisition of Neiman Marcus Group and related financings. Solomon Partners is also serving as a financial advisor to HBC. Elm Street Advisors is serving as strategic, commercial and operational advisor. Deloitte is serving as a financial and tax advisor to HBC.

Willkie Farr & Gallagher LLP is serving as legal counsel to HBC.

J.P. Morgan and Lazard are serving as financial advisors to NMG. Sullivan & Cromwell, LLP is serving as legal counsel to NMG.

Berenson & Company served as financial advisor to Insight Partners.