Neiman Marcus hires debt restructuring adviser – sources

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By Lauren Hirsch and Jessica DiNapoli

<span class="articleLocation”>U.S. high-end department store chain Neiman
Marcus has hired investment bank Lazard Ltd to explore
ways to bolster its balance sheet as it seeks relief from a $4.9
billion debt pile, people familiar with the matter said on

Neiman Marcus is in no immediate risk of bankruptcy, the
sources said. However, the move makes it the highest-profile
U.S. retailer to turn to a debt restructuring adviser so far
this year, as consumers increasingly embrace the internet for

The sources asked not to be identified because the matter is
confidential. Neiman Marcus did not immediately respond to a
request for comment, while Lazard declined to comment. One of
Neiman Marcus’ current owners, Canada Pension Plan Investment
Board (CPPIB), declined to comment.

Neiman Marcus operates 42 Neiman Marcus Stores across the
United States and two Bergdorf Goodman stores in Manhattan. The
company also operates 27 Last Call clearance centers, according
to its website.

In addition to grappling with headwinds affecting other U.S.
retailers, a plunge in energy prices has further hit Neiman
Marcus, because many of its affluent shoppers in Texas have
curbed their spending.

The stronger U.S. dollar has also been negative for Neiman
Marcus, curbing spending at its Bergdorf Goodman department
stores that are popular with New York tourists.

Much of Neiman Marcus’ debt load stems from its $6 billion
leveraged buyout in 2013, when its current owners, Ares
Management LP and CPPIB, acquired it from other private
equity firms.

Unsecured bonds of the Dallas-based company trade at a deep
discount, indicating investor concern about full repayment. Its
bonds due in 2021 traded at 58 cents on the dollar this week,
according to Thomson Reuters data. Neiman Marcus also has an
approximately $3 billion term loan that was trading at 80 cents
on the dollar, according to Thomson Reuters LPC data.

Earlier this year, the department store withdrew its initial
public offering (IPO), two years after it had announced its
plans to U.S. regulators. At the time, the
department store did not explain why it withdrew its IPO

Despite its challenges, Neiman Marcus has been renovating
existing stores and still plans on opening new stores, including
a flagship location at New York City’s Hudson Yards development.

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