Neiman Marcus is seeking bankruptcy protection as soon as this week, becoming the first major U.S. department store owner to succumb to the economic downturn from the coronavirus pandemic, people acquainted with the matter said.
The debt-laden Dallas-based firm has been left with some options after the pandemic pushed it to temporarily close all 43 of its Neiman Marcus outlets, around two dozen Last Call stores and its two Bergdorf Goodman outlets in New York.
Neiman Marcus is in the final phases of negotiating a loan with its creditors totaling hundreds of thousands of dollars, which would sustain a few of its operations during chapter proceedings, based on the sources. It has furloughed many of its around 14,000 employees.
The bankruptcy filing may come within days, though the timing might slip, the sources stated. Neiman Marcus skipped thousands of dollars in debt payments last week, along with one that solely gave the company a couple of days to avoid a default.
Neiman Marcus’ borrowings totaled $4.8 billion, in response to credit rating agency Standard & Poor’s. A few of this debt is the legacy of its $6 billion leveraged buyout back in 2013 by its owners, private equity agency Ares Management and Canada Pension Plan Investment Board.
The sources requested anonymity because the chapter preparations are confidential. Neiman Marcus and Ares refused to remark, whereas CPPIB representatives didn’t instantly reply to requests for remark.