Neiman Marcus Likely to File for Bankruptcy Protection This Week
Neiman Marcus Group is preparing to file for bankruptcy protection this week, becoming the first major U.S. department store operator to succumb to the economic fallout from the coronavirus outbreak, people familiar with the matter told CNBC. Neiman Marcus, which is held by Ares Management Corp. and the Canada Pension Plan Investment Board (CPPIB), is preparing to file after missing a $72 million interest payment on bonds owed in 2024, according to sources among the company’s lenders. While some reports expected Neiman Marcus to file yesterday (April 26), as of press time that has not happened. For the bankruptcy specifically, Bloomberg reported late last month that the retailer held initial talks with lenders about a potential bankruptcy loan that would amount to hundreds of millions of dollars and would keep the company running while it works out a recovery plan. Neiman Marcus is hoping its status as a luxury brand will help it emerge from the crisis a leaner and stronger company. It also doesn't plan to close any of its 43 Neiman Marcus stores as part of its filing.
Total Retail's Take: Neiman Marcus will mark the first major retail bankruptcy of the coronavirus pandemic, which has already started to upend the industry. The pandemic will make managing the bankruptcy a difficult one. After all, it's hard to plan liquidation store sales when nonessential retail stores are closed. All of Neiman Marcus’ stores have been closed since March 17 due to the coronavirus, and most of its 14,000 workers have also been furloughed. Industry analysts forecast that the impact of the coronavirus will set off a wave of retail bankruptcy filings. Neiman Marcus might be the first in a long line to follow.
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