Stylish alliance
Luxury retail marries up
Good morning, friends. This is your Stock Market Rundown for July 8th, 2024. Thanks for joining me for another week of financial fun.
Before we get started, just a heads up: exciting changes are coming to Stock Market Rundown. While I cook them up, I’ll be switching to sending you emails two days a week, from the current schedule of a five days a week. Everything else stays exactly the same. Thanks again for hanging out with me. And stay tuned for more updates soon.
With that, let’s dig in:
TODAY’S TOP STORY: A FASHION POWERHOUSE PAIRING
It was one of the worst-kept secrets in retail: the potential merger of Neiman Marcus and Saks Fifth Avenue. Ever since Neiman emerged from Chapter 11 bankruptcy in 2020, it’s been well-known to have a “for sale” sign on it.
Now, Neiman and Saks are out of the talking stage, and have finally made an engagement announcement. HBC, the parent company of Saks, is officially acquiring Neiman Marcus in a $2.65 billion deal.
The deal merges two of the top luxury retailers at a time when department stores are distressed—and more bargaining power with vendors could boost profits.
Neiman Marcus was founded in 1907 in Dallas, offering sophisticated ladies’ fashions shipped in from New York, to Texan shoppers who’d gotten rich from the oil boom. To this day, Neiman’s store footprint is mostly in the southern and western US, while Saks is more of an east-coast brand.
(If you’re a value investor, Neiman and Saks probably aren’t your top shopping destinations. Not to worry—both retailers have outlet locations where you can score deals on overstock and end-of-season merch.)
HBC, the holding company that will now control both brands, has its own epic origin story. HBC was originally called Hudson’s Bay Company, and it’s the oldest corporation on the North American continent.
It was founded in 1670 as a trading business, exporting furs from the wild forests of Canada to wealthy European buyers, with an exclusive monopoly over a vast swath of territory.
Three centuries years later, HBC has evolved from selling beaver pelts to rich people… to selling luxury handbags to rich people. Some things never change.
SO WHAT ELSE IS GOING ON?
A survey of high-net-worth individuals found that young investors have less of their portfolios allocated to stocks and bonds, than those over 40. Pro tip: always ensure you have adequate exposure to shitcoins, rare sneakers, and collectible Chinese vapes.
Media mogul Barry Diller is rumored to be exploring a bid to get control of Paramount Global, owner of Paramount Pictures and CBS. Diller is 82, which might explain why he wants to buy a business whose top TV properties are NCIS and 60 Minutes.
Hurricane, shmurricane. Despite Beryl bearing down on the continental US, Americas traveled by plane, train, and car in record numbers over the Fourth of July holiday.
JP Morgan’s chief market strategist has been canned after his stock-market predictions were less reliable than a local weatherman’s forecast. Kinda illustrates just how tough it is to call the direction of the stock market, when a guy with a PhD in theoretical physics is whiffing this bad.
That’s it for today, compadres; looking forward to checking in with you later this week for more. Yours in capitalism, The Axe
Thank you so much for reading. If you enjoyed today’s Stock Market Rundown, the #1 thing you can do to help me out is forward it to a friend.