In a bit of a surprise move, e-commerce giant Amazon (NASDAQ:AMZN) will have a role in the recent $2.65 billion merger between Saks Fifth Avenue’s parent company (Hudson Bay Company) and Neiman Marcus, according to The Wall Street Journal. This deal will create a luxury retail giant aimed at retaining affluent shoppers. Amazon is set to take a minority stake in the new entity, Saks Global, and will provide its technology and logistics expertise in order to improve the new company’s operations.
Hudson Bay Company is financing the deal with $2 billion from existing investors, including Rhône Capital and the Abu Dhabi Investment Council.
The combined company is expected to generate about $10 billion in annual sales while strengthening both brands, which is important since Neiman Marcus filed for bankruptcy in 2020. It will also help the new firm negotiate more favorable terms with suppliers. In fact, individual brands have become much more powerful in recent years by selling directly to consumers through their own stores and websites, therefore reducing their reliance on department stores.
Is AMZN a Buy Right Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AMZN stock based on 42 Buys assigned in the past three months, as indicated by the graphic below. After a 51% rally in its share price over the past year, the average AMZN price target of $221.70 per share implies 12.2% upside potential.
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