Global luxury fashion retailer Neiman Marcus has filed for bankruptcy. Rumors began swirling months ago regarding the financial stability of the fashion staple company and now during the multiple week long shutdown across the world behind COVID-19 the company hasn’t, along with many others, haven’t been able to structure for such a catastrophe. Neiman Marcus becomes the first major retailer to file for bankruptcy during the shutdown, and is also owners of Bergdorf Goodman and MyTheresa.com. Just earlier this week retailer J. Crew also filed for Chapter 11 from harsh backlash of the worlds current state. The company came to an agreement with their creditors for a $675 million debtor-in-possession loan. The company has a current debt of about $4 billion which a $750 million exit-financing package has been put in place equipped with a long-term refinancing structure to offset the payments and dwindle the debt.
The current plan will aid in Neiman Marcus avoiding liquidation and a chance to somewhat focus on the foundation of the company, whatever that may be. With the entire Neiman Marcus Groups’ department stores being closed since mid-March puts a heavy stain on cash flow as it represents a majority of profits as the e-commerce section only represents a small fraction with their stores set to be closed through May 31st in some areas. The store has a deep history in Luxury as it was founded in 1907 in Dallas, TX in response to the oil industry skyrocketing with success. Making a true name for themselves they went on to be a part of bringing Chanel stateside.
The brand continues moving forward with positive thoughts and action as detailed in a press releases from CEO and chairman Geoffroy van Raemdonck. “Prior to COVID, Neiman Marcus Group was making solid progress on our journey to long-term profitable and sustainable growth. The binding agreement from our creditors gives us additional liquidity to operate the business during the pandemic and the financial flexibility to accelerate our transformation. We will emerge a far stronger company. In a world that is changing, we are uniquely positioned to give our brand partners access to our loyal luxury customers like no other company. Like most businesses today, we are facing unprecedented disruption caused by the COVID-19 pandemic, which has placed inexorable pressure on our business. We will emerge a far stronger company. In a world that is changing, we are uniquely positioned to give our brand partners access to our loyal luxury customers like no other company.”