CEO Geoffroy Van Raemdonck said the company and other retailers are “facing an unprecedented disruption caused by the COVID-19 pandemic, which has put inexorable pressure on our business,” said a statement.
Neiman Marcus has said he plans to exit bankruptcy by fall. “The binding agreement of our creditors gives us additional cash to run the business during the pandemic and financial flexibility to accelerate our transformation,” added the CEO. “We will become a much stronger company. “
Like other non-essential retailers, Neiman Marcus temporarily closed its 43 stores in mid-March. Since then, a dozen stores have reopened for curbside collection, with some states having relaxed the locking controls.
In connection with the bankruptcy filing, Dallas-based Neiman Marcus said it had obtained $ 675 million in financing from a majority of creditors to continue operating during the restructuring. These creditors now hold more than two-thirds of the company’s debt.
In a letter to customers, Van Raemdonck noted that Neiman Marcus did not intend to liquidate. He said the retailer would continue to honor gift cards and credits as well as accept product returns. The service on the company’s websites will also not be interrupted. The company said it was evaluating the locations, but did not say whether it would close stores.
Filing for bankruptcy is a blow to the private equity firm Ares Management and the Canada Pension Plan Investment Board, which bought Neiman Marcus in 2013 for $ 6 billion.
The case arrived after the department store, burdened with nearly $ 5 billion in debt, failed to make payments to a key bondholder after its stores were shut down to help contain the spread of the virus.
More than 60% of American retailers have closed temporarily since March, but department stores were already in a weak state long before. Americans are no longer interested in doing all their shopping under one roof, instead of choosing and choosing items like shoes or tops. When they buy clothes, they can go to T.J. Maxx and online retailers.
“Department stores have been struggling for a long time,” said Craig Johnson, president of Customer Growth Partners, a retail consulting firm. “Now it’s a bloodbath. The number of those who will survive is unclear. “
Preppy clothing manufacturer J. Crewlast week, also struggling with debt resulting from its leveraged buyout of $ 3 billion in 2011 by private equity firms TPG Capital and Leonard Green & Partners.
The Associated Press contributed to this report.