CNBC: Neiman Marcus Bankruptcy Challenged, Creditors Push for Sale

AddThis Social Bookmark Button

Neiman Marcus is expected to pursue its bankruptcy filing and is in talks with its current lenders about raising roughly $600 million in emergency financing to fund operations through the restructuring, people familiar with the situation tell CNBC.

In bankruptcy, the retailer will work to flush its more than $4 billion of debt leftover from its sale to Ares Management and Canada Pension Plan Investment Board in 2013.  Even before the coronavirus pandemic struck, that debt acted as an albatross, limiting its ability to invest in technology as new competitors like Yoox’s Net-A-Porter encroached on its once untouchable position in luxury retail. 

Beltway Insider: Trump/COVID-19 Roundup, G7 United, Canada Mass Shooting, French Protests, Election

Neiman Marcus is hoping its status as a luxury brand will help it emerge from the crisis a leaner and stronger company. The department store chain also owns high-end Bergdorf Goodman in New York’s midtown. 

It does not plan to close any of its 43 Neiman Marcus stores as part of its planned Sunday bankruptcy filing, the people said. Still, retailers sometimes whittle down their store footprint while in bankruptcy.

Neiman Marcus eyes Sunday bankruptcy filing, $600 million emergency funding

Neiman Marcus previously announced plans to wind down its off-price chain, Last Call, and shutter the majority of its 24 stores by the first quarter of its fiscal 2021, to focus on luxury. 

All of Neiman Marcus’ stores have been shut since March 17 due to the coronavirus pandemic.  Most of its 14,000 workers have also been furloughed.

Financial Wellness 2020: How Women Shoppers Can Beat the Pink Tax

Hudson’s Bay Company, which owns Neiman Marcus competitor, Saks, has been considered a logical suitor for Neiman Marcus, once it filed for a long-anticipated bankruptcy and shed itself of onerous debt. But with revenue for all retailers drastically reduced and markets rattled by the coronavirus pandemic, financing a large deal may be difficult. 

The people requested anonymity because the information is confidential. Neiman Marcus and Ares declined to comment. Hudson’s Bay Company and CPPIB did not immediately respond to a request for comment.

President of Doctors for Disaster Preparedness Offers Don’ts and Dos on Coronavirus

Neiman Marcus will mark the first major retail bankruptcy of the coronavirus pandemic, which has jolted the economy and crippled the already struggling retail industry. It has also made the prospect of managing a bankruptcy a difficult one: it is hard to plan liquidation sales of select stores, or entire store-bases, with non-essential retailers ordered shut. As various states make plans to begin lifting their coronavirus restrictions, retailers must decide how to handle varying mandates.  

Landlords, meantime, will be forced to assess the value of a retailer on its property with little insight as to how easily replace they can them.

A Neiman Marcus bankruptcy could deal a massive blow to Related Companies’ glitzy Hudson Yards shopping mall in Manhattan, where the high-end department store is an anchor tenant, spanning multiple levels with a number of restaurant options. Should Neiman Marcus ever shut its store there, it could trigger requests for rent reductions from other retailers there or even an exodus of tenants.

CNBC Investigates: Inside Home Depot’s Efforts to Stop Professional Shoplifters

A representative from Related did not immediately respond to CNBC’s request for comment.

Retail pain has accelerated throughout the industry.  Gap warned in a filing this week it may not have enough cash flow to sufficiently fund its operations and said it is looking to renegotiate or defer the terms of its leases. It also said it could provide “no assurances” it will be “able to recommence” business at existing leases at all.   

And while malls had in recent years sought to bring “experiential” options into its properties, like gyms, those too have fallen under pressure as the government has recommended “social distancing” to manage the pandemic.

Similar questions may confront J.C. Penney, which is considering its own bankruptcy filing, people familiar with the matter told CNBC. Any potential bankruptcy filing for the department store, though, is at least a few weeks away. It has yet to finalize the detail of any bankruptcy plans and determine how much in bankruptcy financing it would need, people familiar with the matter tell CNBC. 

A spokeswoman for J.C. Penney declined to comment. 

Haute Tease

  • American Made Movie Review – Re-Born in the USA

    AddThis Social Bookmark Button

    American Made Movie,” from Life Is My Movie and Variance Films, brings to the screen a call-to-action documentary presenting a plan to return American Made to a position of strength in the global economy.

  • Darkest Hour Review – Riveting, Gripping, A Triumph

    AddThis Social Bookmark Button

    Darkest Hour, from Working Title Films and Focus Features, presents the story of an unwavering, newly appointed Prime Minister, Winston Churchill facing Adolph Hitler's Nazi Army that is advancing effortlessly throughout Europe with his sight on the United Kingdom.

  • A Halloween surprise FRANKENWEENIE, from WALT DISNEY and Tim Burton, is all treat!

    AddThis Social Bookmark Button

    FRANKENWEENIE, from the genius of Director Tim Burton, presents a story that will awaken the dead as it tells the tale of a promising, scientist filmmaker, his dog and a love that wouldn’t die.

  • Shiver Review – A Terrifying Trip into a Serial Killer’s Mind

    AddThis Social Bookmark Button

    SHIVER,” from Cyclone Productions and Bandersnatch Films, presents a nail-biting, psychological thriller that pits a blood thirsty serial killer against the skill, wit and determination of the detectives and a single surviving victim.

  • Beltway Insider: Obama Promises No U.S. Troops; Putin Remains In Ukraine; Gun Reform Op-Ed; Mid-Terms

    AddThis Social Bookmark Button

    President Barack Obama announced the United States will not send combat troops to assist the Iraqi government fight the escalating insurgency from the terror group, loyal to former leader Osama Bin Laden, Islamic State of Iraq and the Levant.

  • Health, Wellness: 22 Popular and Unusual Gifts Ranked From Least To Most Dangerous

    AddThis Social Bookmark Button

    Toys, for all ages, bring excitement, pleasure and hours of fun! For the gift giver nailing that one perfect gift, can be worth the angst of hours of searching. That perfect gift makes all the misses, simply minuses.  

  • Celebrity Interview: Glenn Close, and Cast of The Wife, Stirs Up the OSCAR Race

    AddThis Social Bookmark Button

    Glenn Close, the star of the recently released The Wife, has been nominated for an Oscar six times, more than any other actress without a win, and as time escapes no one, the meaty performances that woo Academy voters are slower in arriving.

  • Julia “Lady J” Gerard, West Hollywood Designer and Rebel With A Cause, Introduces Project Divine Benefitting Project Angel Food

    AddThis Social Bookmark Button

    Julia “Lady J” Gerard the original rebel with a cause couture designer who has dressed the hottest celebrities from Cher to Rihanna, is opening the doors of her Melrose Studio Gallery for Project Divine, a four day super sale benefiting Project Angel Food.

  • Utah Miracle Baby Survives Car Crash, Sub-Zero Conditions

    AddThis Social Bookmark Button

    Lily Groesbeck is the only survivor of a horrific car crash that killed her mother a sorrowful tragedy that happens all too often and in this accident the survivor, an infant, is being called a miracle baby and her mother an angel who never left her side.

  • World News: Israel Closes Synagogues, Donates Hydroxychloroquine to US

    AddThis Social Bookmark Button

    Former Mayor of Shiloh Israel, David Rubin offers an update of the drastic measures Israel is taking to stop the spread of the COVID-19 virus in an effort to prevent the silent killer from overtaking its population.

  • Business/Finance: Macy’s CEO Jeff Gennette Speaks with CNBC’s "Squawk on the Street" (Exclusive)

    AddThis Social Bookmark Button

    CNBC's "Squawk on the Street" team met up with MACY's CEO Jeffrey Gennette, on Black Friday, the traditional start of the holiday shopping on what is widely considered a make or break shopping season for many retailers.


  • Beltway Insider: Trump Tax Overhaul; Obama/Hezbollah; EU MeToo; Philippine Tragedies; Miss America CEO; Christmas

    AddThis Social Bookmark Button

    President Donald Trump ended his first calendar year in office by signing an historic tax overhaul bill, marking his first legislative victory and jump starting his reelection campaign, in what he calls Making America Great Again.

  • Hunting Charles Manson Book Review - Shocking True Crime Resonates

    AddThis Social Bookmark Button

    Hunting Charles Manson, from Thomas Nelson Publisher and Lisa Wiehl, presents the true crime story of Charles Manson, his followers, the shocking murders the group committed terrorizing residents of Los Angeles during the summer of 1969.

  • Beltway Insider: Trump Tweets Anger Brits; UK Terror Update; UN GA Meets; Paris Accord; Irma Death Toll Rises

    AddThis Social Bookmark Button

    President Donald Trump is making his first appearance this week at the 72nd United Nations General Assembly where 193 Heads of State will convene in New York City to hear the agenda of the newly elected former business leader.

  • Cloudy with a Chance of Meatballs Review: Sunshine, Lollipops and Rainbows All the Time

    AddThis Social Bookmark Button

    "Cloudy with a Chance of Meatballs", the animated version of the classic children's book previewed recently for select media and followed with a press junket at the world famous Dylan's Candy Store on Manhattan's Upper East Side.