Dallas — Neiman Marcus Group LTD LLC has entered into a Restructuring Support Agreement (RSA) with a significant majority of its creditors to undergo a financial restructuring, substantially reducing its debt load and interest payments and supporting continued operations during the COVID-19 pandemic and beyond.
To implement the RSA, the company has commenced voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division. As part of the process, Neiman Marcus Group has secured debtor-in-possession (DIP) financing of $675 million from creditors to enable business continuity throughout proceedings.
“Prior to COVID-19, Neiman Marcus Group was making solid progress on our journey to long term profitable and sustainable growth,” says Geoffroy van Raemdonck, chairman and chief executive officer of Neiman Marcus Group. “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. However, like most businesses today, we are facing unprecedented disruption caused by the COVID-19 pandemic, which has placed inexorable pressure on our business.”
He continues: “The binding agreement 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. We will deliver that through the strength of our associate relationships and digital solutions.”
The company expects to emerge from the process in early fall 2020.
Neiman Marcus Group also provided an update on the following actions to efficiently manage its business through the COVID-19 pandemic:
- Temporary closures of some Neiman Marcus, Bergdorf Goodman and Last Call stores have been extended through May 31.
- The company continues to leverage the strength of its e-commerce platforms, continuing to serve customers remotely and digitally through its associates and style advisors, as well as on the Neiman Marcus and Bergdorf Goodman websites and apps.
- Furloughs or temporary salary reductions have been put into effect for a large portion of associates through at least May 31 with the potential to either extend or shorten based on COVID-19 developments.
- A total of 10 stores nationwide are now open for curbside pickup: all Texas Neiman Marcus stores, as well as Tampa, Las Vegas and Tysons Corner, Va.
- On May 4, the Atlanta and NorthPark Neiman Marcus stores became available to customers by private appointment.
- The company will continue to assess store closure decisions and will reopen stores as it is safe to do so based on the status of the pandemic. The Chapter 11 process will not impact the timing of store re-openings.
Kirkland & Ellis LLP is serving as legal counsel to the company, Lazard Ltd. is serving as the company’s investment banker, and Berkeley Research Group is serving as the company’s financial advisor.
Neiman Marcus Group is a luxury, multi-branded, omni-channel fashion retailer conducting integrated store and online operations under the Neiman Marcus, Bergdorf Goodman, Neiman Marcus Last Call and Horchow brand names. For more information, visit http://www.neimanmarcusgroup.com.
SOURCE: The Neiman Marcus Group, Inc.