Luxury department store Saks Fifth Avenue's parent company, HBC, is acquiring Neiman Marcus for $2.65 billion, creating a dominant upscale department store in the U.S. Amazon will have a stake in the new combined company, providing technology and logistics support. The merger comes as luxury brands are challenging department stores by connecting directly with customers. HBC's CEO, Richard Baker, plans to use artificial intelligence to enhance personalized shopping experiences. The luxury retail market thrived during the pandemic but is now facing a shift towards online shopping. Competitors like Macy's and Nordstrom are adjusting their strategies amidst pressure from investors. Federal regulators may closely scrutinize the merger, in light of recent antitrust actions against other market leaders. Saks Fifth Avenue and Neiman Marcus have a combined total of 75 stores across North America.