Neiman Marcus To File for Bankruptcy

As many expected, Dallas-based Neiman Marcus announced Thursday it would file for Chapter 11 bankruptcy protection.

Last month, the company missed several debt payments including one that only gave the company a few days to avoid defaulting. Standard & Poor’s said the company has nearly $5 billion in debt, including legacy debt from a 2013 $6 billion leveraged buyout by its owners, Ares Management Corp. and Canada Pension Plan Investment Board.

“This is not a liquidation of our business, but simply a process that allows our company to alleviate debt, access additional capital to run the business in these challenging times, and emerge a stronger company with the ability to better serve you and continue our transformation over the long term,” company CEO Geoffroy van Raemdonck said in a letter to customers.

As part of the filing, the company said it has obtained $675 million in financing from creditors to continue operations during the restructuring.

“These creditors have also committed to fulfill a $750 million exit financing package that
would fully refinance the DIP financing and provide additional liquidity for the business,” the company said.

“Prior to COVID-19, Neiman Marcus Group was making solid progress on our journey to long-term profitable and sustainable growth. We have grown our unrivaled luxury customer base, expanded our industry-leading customer relationships, achieved higher omni-channel penetration, and made meaningful strides in our transformation to become the preeminent luxury customer platform,” van Raemdonck said in a statement to the press. “However, like most businesses today, we are facing unprecedented disruption caused by the COVID-19 pandemic, which has placed inexorable pressure on our business.”

Bethany Erickson

Bethany Erickson, Digital Editor at People Newspapers, cut her teeth on community journalism, starting in Arkansas. Recently, she's taken home a few awards for her writing, including first place for her tornado coverage from the National Newspapers Association's 2020 Better Newspaper Contest, a Gold award for Best Series at the 2018 National Association of Real Estate Editors journalism awards, a 2018 Hugh Aynesworth Award for Editorial Opinion from the Dallas Press Club, and a 2019 award from NAREE for a piece linking Medicaid expansion with housing insecurity. She is a member of the Education Writers Association, the Society of Professional Journalists, the National Association of Real Estate Editors, the News Leaders Association, the News Product Alliance, and the Online News Association. She doesn't like lima beans, black licorice or the word synergy. You can reach her at bethany.erickson@peoplenewspapers.com.

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