(Reuters) – The parent of Saks Fifth Avenue said on Thursday it has agreed to buy rival luxury retailer Neiman Marcus in a $2.65 billion deal.

HBC, the parent firm, said it will establish Saks Global, a combined entity of Saks Fifth Avenue, Neiman Marcus and other luxury retail and real estate assets.

The deal was announced at a time when luxury retailers are battling slowing demand as high borrowing costs force customers to crimp budgets following a luxury retail boom after the COVID-19 pandemic.

Marc Metrick, the CEO of the e-commerce Saks business, will run the combined company.

The companies said online retailer Amazon.com (NASDAQ:) and customer relationship software provider Salesforce (NYSE:) will also be investors in Saks Global.

Neiman Marcus is known for selling designer dresses, shoes, handbags and other luxury products.

J.P. Morgan and Lazard (NYSE:) served as the financial advisers to Neiman Marcus Group in the deal.