Upscale department store chain Neiman Marcus Group Inc. (search) said on Monday it agreed to be bought by two private equity firms for about $5.1 billion, sending its shares down nearly 6 percent.

The purchase places a bet on the sustainability of the luxury goods market, which has seen a surge in demand in recent years as the economy crawled out of recession and the stock market rebounded.

Neiman Marcus — known for its high-end fashions and lavish Christmas catalog offering items like personalized robots, Steuben crystal and rare sports collectibles — has benefited from this boom. Its shares have moved steadily higher since late 2002, and in January through April this year, its stock price increased about 37 percent.

The sharp run-up in the company's stock, however, has left some wondering if the much-anticipated acquisition was made at the market's peak and whether Neiman Marcus would be able to sustain its recent performance.

"They are taking a tremendous gamble ... that Neiman Marcus continues to perform on a monthly basis with same-store sales every month at the same, very impressive clip that it has done for the last couple of years," said Kurt Barnard, president of Barnard's Retail Consulting Group.

"It is hard to imagine that the trend, which it has shown for the last couple of years, is sustainable."

Neiman said Texas Pacific Group (search) and Warburg Pincus LLC (search) will acquire all of the outstanding Class A and B shares of Neiman Marcus Group for $100 per share in cash. Its Class A shares fell 5.9 percent, or $5.79, to $92.53 in midday trading on the New York Stock Exchange.

Each of the investors will own equal stakes in the company upon completion of the deal, it said.

"Some speculated that the valuation would be significantly higher than $100 per share, but because the company is already efficiently run and margins are high, we believe that there is limited opportunity to reduce costs," Merrill Lynch said in a research note.

Texas Pacific and Warburg Pincus will likely try to "accelerate the company's store growth and bring the company public again at a premium," Merrill Lynch said.

Neiman Marcus, operator of its namesake stores and the more specialized Bergdorf Goodman (search) chain, has had six straight quarters of double-digit sales increases at stores open more than a year. The company said it expects same-store revenue to rise 5 percent to 6 percent in the third quarter.

The Neiman deal follows a rush of mergers in the retail industry, coming after Federated Department Stores Inc.'s (FED) agreement to buy rival May Department Stores Co. (MAY) and the recent purchase of retailer Barneys New York by Jones Apparel Group Inc. (JNY)

On Friday, Saks Inc. (SKS) said it would sell two regional department store chains for $622 million to Belk Inc., and weigh the sale of additional stores as it focuses on its Saks Fifth Avenue luxury department store business.

In March, Neiman Marcus said it was weighing a sale of the company and hired Goldman Sachs & Co. as its financial adviser.

Neiman Marcus said the Smith family, which owns a significant percentage of the company's equity, entered into an agreement to vote its shares in favor of the merger.

The retailer said the deal is subject to regulatory review and shareholder approval.