Neiman Marcus Reportedly ‘Several Weeks Away’ From Potential Bankruptcy
The report comes less than two weeks after Bloomberg indicated that Neiman Marcus was mulling whether to file for Chapter 11 protection. The report added that the company had begun engaging in preliminary talks with lenders about a bankruptcy loan to keep it going as a recovery plan is worked out.
“We are evaluating all courses of action to preserve our financial strength so that we may continue serving our customers and associates, and being a great partner to luxury brands globally,” a spokesperson told FN at the time.
Neiman Marcus declined to provide additional comments for this story.
Amid digital disruption and reduced foot traffic, the retailer has faced numerous struggles in its quest for profitability. In August 2018, it announced a four-year transformation plan that has entailed investing in omnichannel and supply chain technology, as well as embracing the growing resale trend through a minority stake in consignment company Fashionphile.
However, Neiman Marcus has a massive debt load of over $4 billion, much of which dates to its 2013 private equity buyout. It has looked into strategies for raising capital, including the potential sale or IPO of its MyTheresa e-commerce site.
Last year, the chain was able to rework its debt and avoid filing for bankruptcy, but the escalating coronavirus pandemic forced the company to shutter its Neiman, Last Call and Bergdorf Goodman banners over the past few weeks. A “large portion” of its workforce was either furloughed or deducted pay. CEO Geoffroy van Raemdonck is forfeiting his salary, while executives reporting directly to him waived a “significant amount” of their own base pay.
“This is a truly unprecedented time,” van Raemdonck said on Tuesday. “While these are the most difficult decisions to make, our focus is on ensuring our business is protected over the long term so we can continue serving our associates and customers.”