Neiman Marcus files for bankruptcy protection
Neiman Marcus Group is poised to appeal to the state for bankruptcy protection this week, becoming the first major American department store chain to face serious financial consequences from the coronavirus.
Amid the pandemic, the already debt-ridden Dallas company was forced to temporarily close all 43 of its stores. Neiman Marcus, about two dozen Last Call stores and two Bergdorf Goodman offices in New York.
The department store chain has already laid off about 14 thousand employees and is in the final stages of negotiations on a loan totaling hundreds of millions of dollars, which will allow it to retain part of its assets during bankruptcy proceedings.
Neiman Marcus has a debt of about $ 4.8 billion. Preparing for bankruptcy is confidential.
Other department store operators, who have also been forced to close their stores, are fighting to avoid the fate of Neiman Marcus. Macy&# 39; s Inc and Nordstrom Inc secured new funding by mortgaging some of their properties. J. C. Penney Co Inc Sees Bankruptcy Filing As A Way To Save On Upcoming Debt Payments.
Neiman Marcus has been trying to avoid financial ruin for several years. He deferred the maturity of his financial obligations last year as part of a restructuring deal with some creditors..
A trustee for some of the company’s bondholders sued Neiman Marcus last year, claiming the firm and its owners have deprived investors of the value of their MyTheresa e-commerce project by moving the business out of the reach of lenders in a corporate reshuffle.. The company claims its actions were correct.
«In light of the pandemic and the likely US recession this year, we believe the company’s prospects for business recovery are increasingly bleak.», – analysts say S&P in last week’s note.
After filing for bankruptcy, the network may attract interest from a number of investors wishing to take some of the company’s assets at a lower price..
The first Neiman Marcus store opened in Dallas in 1907. It was opened by the families of Marcus and Neumann, who decided to set up a retail venture after the regulator refused to invest in a then little-known soft drink called Coca-Cola..
Like other major department store chains, Neiman Marcus has struggled in recent years to compete with discounted retailers and the consumer shift to online shopping..
The outbreak of the coronavirus has made the situation worse. Despite the fact that some employees returned to closed stores to fulfill online orders, these operations cannot compensate for lost sales in stores..