2025 signals big changes for major US luxury retailers

While at least half the U.S. is “buckling up” for the incoming administration that promises some radical changes to society and the economy, major luxury retailers start the new year redefining their existence.

Despite the potential for the Biden administration’s staunch anti-trust position—proof of that was seen in the now-defunct Tapestry and Capri Holdings merger—Saks Global completed its acquisition of Neiman Marcus Group (NMG) for $2.7 billion, thus adding Neiman Marcus and Bergdorf Goodman to its Saks Fifth Avenue and Saks Off Fifth properties.

Nordstrom achieved its goal of going private, agreeing to a buyout valued at $6.25 billion from the Nordstrom family and Mexican retailer El Puerto de Liverpool.

These deals happen when the industry at large feels an unpredictable future, according to a recent McKinsey Executive Survey. While 20 percent feel the space will improve, 41 percent expect it to remain the same, and 39 percent expect a further decline. The majority cited diminished consumer confidence as a concern in 2025, geopolitical instability, and economic irresolution. On the upside, inflation isn’t on the list of top worries as interest rates stabilize.
 
Beefing up in-store experiences to include a well-trained staff to assist shoppers and recognizing the oft-overlooked Silver Generation over-50 customers whose pocketbooks have plenty of discretionary funds. FashionNetwork.com spoke with several fashion industry figures about how these two significant deals may shape luxury department stores.
 
Gary Wassner, CEO of Hilldun Corporation, a premier factoring and finance company, who has worked with businesses such as Tommy Hilfiger, Betsey Johnson, Marc Jacobs, Alexander Wang, A.L.C., Golden Goose and Amiri, among others, notes the moves signal much-needed change. For one, it means decision-making free of shareholders’ opinions being public demands

“There are changes they should or would have made over the past few years but were impacted by the market. Being scrutinized by the shareholders made it difficult to institute new policies, increase marketing spending, close underperforming stores, and perhaps see a lower EBITDA or ‘earnings before interest, taxes, depreciation, and amortization’ over the short term while doing so,” Wassner told FashionNetwork.com. 

“Once private again, they can do what they feel is needed without having the public market looking over them. The Nordstrom family is among the best and brightest in the industry.  I trust that we will start seeing an invigorated retail presence, innovations, and changes that have been stalled and stifled.”

Wassner feels that acquiring NMG will give Saks global dominance in the luxury retail sector, potentially resulting in fewer leased luxury spaces inside multi-brand department stores.

“Major European conglomerates dictate policy to them by their dominance in the luxury space.  With luxury sales dropping and the consumers’ disenchantment with the out-of-proportion rising product prices, I’m hoping that Saks Global can regain its negotiating power,” Wassner said.
 
“Leased departments by LVMH and Kering are great for those companies, but they change the consumer’s experience when they shop at Saks. Leased shops employ their sales teams to further the brand they work for, not the image or shopping experience at Saks. The margin Saks and Neiman’s earn from leased departments is lower than from wholesale purchases of brands’ products. With this merger, if brands want to be represented in the U.S.—still the largest market for designer and luxury sales—they will have to behave nicely in this transformed playground,” he continued.
 
Similar to the trend of magazine job-hubbing, the merger will also decrease the executive headcount. Saks Global CEO Mark Metric will assume NMG’s CEO Geoffroy van Raemdonck‘s duties as he and other senior NMG executives have left the company. Darcy Penick, president, Bergdorf Goodman; head of product & technology Neiman Marcus Group, has left, and Saks’ chief merchandising officer Tracy Margolies will replace her. EVP chief communications officer Tiffin Jernstedt has also left. A social media post by Jernstedt indicated she had fulfilled the Neiman Marcus image gloss-up prior to the sale.
 
“They will find efficiencies in many areas by consolidating operations. Logistics and fulfillment are prime examples of benefits from merging,” Wassner said, adding, “I hope the buying teams remain separate and distinct. One thing retail does not need more of is homogenization. Neiman’s and Bergdorf represent the pinnacle of U.S. luxury and have successfully done this under van Raemdonck’s leadership. I’m hoping the consumer won’t be harmed but benefit from better merchandising, less competition between the two entities, more diversity of products and brands, thoughtful and organized sales cadences, and a better consumer experience. I’ve supported Saks throughout this transitional period because I believe in their management and ability to create something special for the customer and the industry.” 

Hilldun provided credit guarantees to its clients to continue shipping to Saks and noted that they received regular payments from Saks during the acquisition period. (This has not been the case with all Saks vendors and also not uncommon in such deals.)

Albert Varkki—a retail and shopping expert and the co-founder of Estonian luxury leather goods brand Von Baer—views the U.S. retail climate from an objective point-of-view and sees these particular moves as reflective of an industry at a crossroads as they adapt to changing consumer behavior.

“These changes signal a strategic shift toward more streamlined luxury ecosystems. The Saks-Neiman Marcus merger allows for shared inventory management and e-commerce infrastructure to be leveraged for competitive positioning with platforms like Farfetch. Nordstrom’s privatization might free it to pursue experimental, long-term plays unfettered by shareholder pressures and instead invest in experiential retail or very localized inventories,” Varkki told FashionNetwork.com.

 “On the other hand, these changes highlight the challenges of conventional retail, with high operational costs and the inevitable requirement to differentiate from giant retailers like Amazon or Walmart. This not just indicates a struggling sector but one that is reimagining what is needed for the future, where exclusivity, personalization, and simplicity of omnichannel experiences define success. It is more about transformation in a sector that must innovate to retain reliance and less about survival,” he added.

Jeanel Alvarado—a Canadian marketing and retail strategist and founder of RetailBoss.com—shared her perspective on the Nordstrom deal with FashionNetwork.com.

“Nordstrom has lost direction over the years and has continued to prioritize its Nordstrom Rack arm, which has, in a sense, cannibalized its own Nordstrom brand. I hope the change in ownership gives Nordstrom more control over the brand’s direction and brings it back to its original heritage and roots,” she said.

The brand closed all of its Nordstrom and Nordstrom Rack stores in Canada in 2023.

How it unfolds for retail will be interesting to watch in 2025. These changes could be a resuscitating heartbeat or the final give-it-all-you’ve-got. Considering Macy’s started the year announcing the closures of key stores, it’s not off to a great start.