For nearly 35 years I have been advising the CEOs and leadership teams of retailers and consumer businesses on strategies for transformation and success. Along the way I have had a front-row seat to the global forces remaking the luxury retail sector. Today I find myself confronting two very different realities regarding one of the most consequential deals of our time: the formation of Saks Global.
On one side is the narrative I encounter in a narrow but vocal segment of cynics and self-proclaimed industry experts. Those few critics speculate constantly that the company will fail to meet its obligations and is destined for collapse. On the other side is the reality I see firsthand: a leadership team executing on a strategy that puts the U.S. consumer firmly in the center of today’s global luxury ecosystem.
The combination of Saks and Neiman Marcus into a single entity last December — with Saks’ veteran Marc Metrick at the helm, who I have worked with over the years — represents one of the most significant developments in U.S. luxury retail in decades. Scale drives growth, operational efficiencies reduce costs, much needed technology brings innovation, and strategic investments enable personalization and service at the level of luxury customers expect. But the real genius of this combination is that it creates a platform capable of sustaining and advancing the health of the entire luxury market in the United States.
The combined scale and investments mean more choice and better service while also governing price increases. It means space — both literal and figurative — for new and emerging designers who would not stand a chance without a strong multi-brand retailer to support them. This is not simply about survival. Saks Global must thrive if the luxury ecosystem is to remain competitive and creative.
Common sense
There is a reason why the Saks Global deal was approved quickly by Federal Trade Commission: Saks Global is good for the U.S. economy, good for consumers, and good for the thousands of designers, artisans, and craftspeople whose livelihoods depend on a healthy luxury retail sector.
Given the common sense of the merger, it is curious how quickly the narrative from a small subset of media voices has turned negative. Over the past several months, these commentators have predicted negative outcomes that simply haven’t materialized: that Saks wouldn’t make its first interest payment (it did), that vendors wouldn’t be repaid (they are), and that bondholders wouldn’t provide additional capital (they have).
You wouldn’t know any of these things from their coverage and commentary, which has taken on an almost obsessive tone. At best, it reads as if Saks Global has already failed. At worst, the narrative seems invested in—and rooting for—that outcome. Each inaccurate prediction should diminish these commentators’ credibility, and yet their incessant drumbeat of pessimism continues, lacking any context or fair and factual counter narrative.
Mergers are always complex. Even with the best planning they present unexpected challenges from day one. The strongest leaders reassess, adapt, and make the best decisions possible with the information available. This is not only about merging two storied companies but also reshaping an entire industry. That requires clarity of purpose and the ability to navigate day-to-day realities. Leadership teams deserve the chance to do both.
When we talk about the future of the U.S. luxury market, we are really talking about whether there will be an anchor to lead what needs to change and is strong enough to support designers, safeguard consumer choice, and foster a new era of technological innovation. Anyone who cares about the health of this industry should consider the consequences if retail at this level of iconic brands does not meet the bold vision set out by this merger. The alternative serves no one’s interests.
Saks Global is the pillar this market needs. The stakes for a vibrant U.S. luxury economy are far too high for anything less than its success.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
