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Neiman Marcus weighing up bankruptcy: Bloomberg
Posted on Tuesday, 24 March 2020 11:15
US department store chain Neiman Marcus has entered discussions with lenders as it considers filing for chapter 11 proceedings, people close to the situation told Bloomberg.
According to those sources in the know, a possible bankruptcy loan would help the company keep its stores open, cut its borrowings and close ailing outlets to reduce its costs.
The insiders, who asked to remain anonymous as the talks are private, cautioned no formal decisions have been made and the situation could change depending on market conditions and the impact of the coronavirus outbreak.
Just last week, Neiman Marcus announced it had temporarily closed its 42 stores in the US, as COVID-19 continues to spread across the country.
The company said it would keep its online shopping channels open for customers, as it attempts to combat the impending sales slump brought on by the closures, Bloomberg noted.
Headquartered in Texas, Neiman Marcus operates a chain of luxury department stores throughout the US.
The group sells a range of men’s and women’s clothing, shoes, handbags, as well as beauty products such as serums, oils and eye creams.
During the nine months ended 27th April 2019, Neiman Marcus posted net sales of USD 1.05 billion, down 32.7 per cent from USD 1.56 billion in the corresponding period of 2018.
At the same date, the group had long-term liabilities of USD 6.23 billion.
In March last year, Neiman Marcus reached an agreement with its lenders to extend the maturities of its debt by three years.
That said, the company has still struggled to offload its liabilities, partly due to several leveraged buyout transactions which has seen its borrowings increase, Bloomberg noted.
Zephyr, the M&A database published by Bureau van Dijk, shows there were 145 deals targeting department store operators announced globally in 2019.
ESL Investments, via Transform Holdco, bought Sears Holdings’ US-based assets for USD 5.20 billion in the most valuable of these.
© Zephus Ltd