(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 ( AMZN ) and customer relationship software provider Salesforce ( CRM ) 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 served as the financial advisers to Neiman Marcus Group in the deal.