Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Exclusive: Neiman Marcus to file for bankruptcy as soon as this week - sources

Stock MarketsApr 19, 2020 03:35PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. Shoppers enter and exit the Neiman Marcus at the King of Prussia Mall, United States' largest retail shopping space, in King of Prussia 2/2

By Mike Spector and Jessica DiNapoli

(Reuters) - Neiman Marcus Group is preparing to seek bankruptcy protection as soon as this week, becoming the first major U.S. department store operator to succumb to the economic fallout from the coronavirus outbreak, people familiar with the matter said.

The debt-laden Dallas-based company has been left with few options after the pandemic forced it to temporarily shut all 43 of its Neiman Marcus locations, roughly two dozen Last Call stores and its two Bergdorf Goodman stores in New York.

Neiman Marcus is in the final stages of negotiating a loan with its creditors totaling hundreds of millions of dollars, which would sustain some of its operations during bankruptcy proceedings, according to the sources. It has also furloughed many of its roughly 14,000 employees.

The bankruptcy filing could come within days, though the timing could slip, the sources said. Neiman Marcus skipped millions of dollars in debt payments last week, including one that only gave the company a few days to avoid a default.

Neiman Marcus' borrowings total about $4.8 billion, according to credit ratings firm Standard & Poor's. Some of this debt is the legacy of its $6 billion leveraged buyout in 2013 by its owners, private equity firm Ares Management Corp and Canada Pension Plan Investment Board (CPPIB).

The sources requested anonymity because the bankruptcy preparations are confidential. Neiman Marcus and Ares declined to comment, while CPPIB representatives did not immediately respond to requests for comment.

Other department store operators that have also had to close their stores are battling to avoid Neiman Marcus' fate. Macy's Inc (NYSE:M) and Nordstrom Inc (NYSE:JWN) have been rushing to secure new financing, such as by borrowing against some of their real estate. J.C. Penney Co Inc is contemplating a bankruptcy filing as a way to rework its unsustainable finances and save money on looming debt payments, Reuters reported last week.

A bankruptcy filing would be a grim milestone that Neiman Marcus has spent the last few years trying to avoid. It pushed out due dates on its financial obligations last year in a restructuring deal with some creditors, though the transactions added to Neiman Marcus' interest expenses.

A trustee for some of the company's bondholders sued Neiman Marcus last year, claiming the firm and its owners robbed investors of the value of its luxury e-commerce site MyTheresa by moving the business beyond the reach of creditors in a corporate reshuffling. Neiman maintains its actions were proper.

"In light of the significant headwinds stemming from the coronavirus pandemic and our expectation for a U.S. recession this year, we believe the company's prospects for a turnaround are increasingly low," Standard & Poor's analysts wrote in a note last week.

"We continue to view its capital structure as unsustainable," the analysts added, lowering their credit rating on Neiman Marcus deep into "junk" territory. They said the move reflected the "elevated potential" of a debt restructuring.

Once it files for bankruptcy, Neiman Marcus could attract interest from potential suitors seeking to pick up the company or some of its assets on the cheap, the sources said.

Saks Fifth Avenue owner Hudson's Bay Co explored a bid for Neiman Marcus in 2017 but did not pursue it, people familiar with the matter said at the time. The Canadian company was taken private earlier this year by a group of shareholders led by its chief executive Richard Baker, and it is unclear if it remains interested or would be in a position to pursue a new bid.

A Hudson's Bay representative did not immediately return a request for comment.

FROM FASHION FIXTURE TO BRINK OF BANKRUPTCY

The first Neiman Marcus store opened in Dallas, Texas, in 1907. It was opened by the Marcus and Neiman families, which decided to pursue the retail venture after considering and rejecting an investment in a little-known soft drink at the time called Coca-Cola (NYSE:KO), according to Neiman Marcus' website.

The company expanded across the United States and in 1972 it acquired New York City's Bergdorf Goodman, itself founded in the early 1900s, becoming a fashion fixture for celebrities and wealthy customers seeking expensive handbags and clothing.

Like other brick-and-mortar department store operators, Neiman Marcus struggled in recent years to compete with discount retail chains and a consumer shift to online shopping. Luxury e-commerce firms such as Yoox (MI:YNAP) Net-A-Porter Group (YNAP) and Farfetch Ltd have added to the competitive pressure facing Neiman Marcus.

The coronavirus outbreak has pushed the company to the brink. While it has asked some workers back to closed stores to fulfill online orders, these operations cannot make up for lost sales in physical stores.

Exclusive: Neiman Marcus to file for bankruptcy as soon as this week - sources
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (14)
DrFunkenstein hayson
DrFunkenstein hayson Apr 19, 2020 6:57PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
needless mark up gone. wow
Kevin Ryan
Kevin Ryan Apr 19, 2020 6:30PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
This company *****and had a ton of debt
Donald Hansen
Donald Hansen Apr 19, 2020 6:16PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Retail Apocalypse Now
Nissan Yaron
Nissan Yaron Apr 19, 2020 4:42PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
So I guess stimulus are not necessarily the magic wand for everything, ha?
Kilo Byte
Kilo Byte Apr 19, 2020 4:42PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Hahahaha Ppppppwned.
Tiên Thủy
Tiên Thủy Apr 19, 2020 4:09PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
24 hour fitness next?
Kilo Byte
Kilo Byte Apr 19, 2020 4:09PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
They'll emerge from bankruptcy as 12 Hour Fitness.
Paul Wall
Paul Wall Apr 19, 2020 4:09PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
everyone I know still has to pay monthly payment per contract. we are getting 2 months free when we renew.
DRC Industries
DRC Industries Apr 19, 2020 4:09PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
24 hour filthy
Sky Loh
Sky Loh Apr 19, 2020 3:46PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The market raise is because of hope, if lost hope the market will be new low
Kilo Byte
Kilo Byte Apr 19, 2020 3:46PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Oh yeah?
Canis Lupus
Canis_lupus Apr 19, 2020 3:45PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
As each of these major retailers file bankruptcy, where will the jobs go? The market is going higher based on the hope everything will be a party like it 2019 after we reopen. Except, every story like this is one more job that won't be replaced. it's very sad for the employees and very naive of this market.
Show previous replies (2)
Canis Lupus
Canis_lupus Apr 19, 2020 3:45PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
because of exactly what you say, there could be a pullback at some point, but we won't make new lows.
Don Getty
Don Getty Apr 19, 2020 3:45PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Canis Lupus  certified financial adviser - Personally i like many got caught by the drop - but close to the bottom I used Buffets - maxim - be bold when other are fearful and fearful when others are bold - I took all my fixed bond income funds/preferred shares and cash and flipped to equities on the 26th - I sold all the acquired equities two friday's ago and am sitting now in half cash! I recovered all I lost and am positioned with the holding I have to see a 15% gain by year end if we only recover another 10% - I like many think this is far from over - all the bluster of the GOP doesn't come anywhere close to the real world economic suffering we are about to see! QE is not going to be able to stop all the bankruptcies, lost jobs and pushed out future purchases - how many Americans do you really see buying a new car this year! That doesn't even touch on new personal devices - I don't care how fancy the new Samsung/Apple products are if your experiencing real financial pain!
Canis Lupus
Canis_lupus Apr 19, 2020 3:45PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Don Getty  Wow that was a pretty genius move. I actually did just the opposite. I shorted the S&P late last year. I did pull the trigger a little early, but figured earnings were a hoax and the economy wasn't weak, but not as strong as equities made it look. We will be in that same boat again with all the liquidity that's being created. We will get back into the buy the dip scheme simply because there is so much excess cash and, as mentioned by the other post, Cash will devalue and bond yields are too low to be effective, So, the only other reasonable place is equities. That is why more pullback, possibly to lows, is expected due to economic shocks. But, those pullbacks will be bought simple because of excess cash, not because of anything good concerning the economy.
klaus von l
klaus von l Apr 19, 2020 3:45PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Canis Lupus  certified financial analyst
Don Getty
Don Getty Apr 19, 2020 3:45PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Canis Lupus  I agree - there will be a number of swings based on real world results - retail and Retail Reit's are about to get hammered, then its the manufactures all those goods being manufactured overseas for a shutdown US retail market - trouble on the horizon - emotional FOMO verses - targeted investing during the downtrends - Real recovery is likely 3-6 months after the phased in approach's work - Oil at some point will have a major swing when people have started to return to a more normal set of activities and demand starts to draw down the massive current builds! But a rushed return could easily set up a major drop when cases once again surge and lockdown's have to once again be instituted! Some people are going to make a lot of money and a corresponding group will lose! Our financial adviser was you want to do what now he's let me know when you want to get back in! Nice guy but they do well by being in the average not at the front of the Risk/Reward gamble!
Kaveh Sun
Kaveh Sun Apr 19, 2020 11:12AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Retail apocalypse 2
Kaveh Sun
Kaveh Sun Apr 19, 2020 11:12AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Now playing everywhere near u
yeh nah
yeh nah Apr 19, 2020 11:12AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Kaveh Sun  too bad I can't watch it cause the theaters are shutdown
Brady Murray
Brady Murray Apr 19, 2020 9:55AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
We Stopped shopping here after this company got political against Trump in 2015. I am sure thousands did the same. Feel sorry for employees but these companies that get political are gambling.
Show previous replies (2)
Nicholas Joh
Nicholas Joh Apr 19, 2020 9:55AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Gamer Turtle He said that they got political and that was his response. Surely that's reasonable isn't it?
Don Getty
Don Getty Apr 19, 2020 9:55AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
funny how Amazon doesn't seem to have the same problem - Can't get much more anti -trump than Bezo's - Wonder have you noticed that the newest flu hasn't magically disappeared - 19th of April now and the intellectually detached GOP are still pushing forward plans without having the required testing materials available to be able to manage their new phased approach! Companies overloaded with debt are going to fail - economics not politics - oh and those with interests similar to the Blowfish will get bailouts - self dealing at its finest!
Nick Gee
Nick Gee Apr 19, 2020 9:55AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
You can tell you've never been to NM. $8 T-shirts that say "I'm a couch potato" is more your speed....lol
Brady Murray
Brady Murray Apr 19, 2020 9:55AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
regardless when you get political people boycott you period. NM was not in a position of strength to do what they did against Trump and pretty sure this helped them into BK just a little faster. Sure didn't help! Now off to some futures trading.
Gamer Turtle
GamerTurtle Apr 19, 2020 9:55AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
reasonable? then why Amazon doing better Every year. it is only reasonable because you're biased enough to think so. a good trader needs to be unbiased toward information to process them as accurately as possible. simply said the guy is a political troII trying to expand from CNN/fox
Jeff Gordon
Jeff Gordon Apr 19, 2020 9:46AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
stock market will roar higher on this. The more bad news the higher it climbs. The Fed injects money with every hit to make it appear all is fine
Gamer Turtle
GamerTurtle Apr 19, 2020 9:26AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
it's all good as long as market continue to go higher.
Qasem Saleh
Qasem Saleh Apr 19, 2020 9:11AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Why did you write such a long easay about a private company? The purpose is clear: to encourage investors to sell JWN and M stocks. This is bad way to send messages, and fake website.
Ronald Warren
Ronald Warren Apr 19, 2020 7:51AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
We experienced the first sell-off when the virus struck. The effects of the damage to the economy will set in. By the end of June the market will hit another bottom. Worse than the first. Hold a little cash for a tasty short!
Ali Bransford
Ali Bransford Apr 19, 2020 6:54AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
first of many, across many sectors. one down... one hundred to go.
Enrico Delfini
Enrico Delfini Apr 19, 2020 6:54AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
More like 500 to go
Alex Vayner
Alex Vayner Apr 19, 2020 6:54AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
retail is next
Richard Collins
CrystalKen Apr 19, 2020 6:54AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
But the strong will survive. This was a weak brand before the virus, same as Debenhams in the UK.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email