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Neiman Marcus filed for bankruptcy Thursday, blaming the coronavirus for spoiling its turnaround and forcing it into a restructuring. The Dallas-based luxury chain became the second major retailer to declare bankruptcy this week, following J.Crew’s Monday Chapter 11 filing, as the pandemic kneecaps the industry. Neiman said it reached a restructuring deal with most of …
Neiman Marcus filed for bankruptcy Thursday, blaming the coronavirus for spoiling its turnaround and forcing it into a restructuring.
The Dallas-based luxury chain became the second major retailer to declare bankruptcy this week, following J.Crew’s Monday Chapter 11 filing, as the pandemic kneecaps the industry.
Neiman said it reached a restructuring deal with most of its creditors that will eliminate about $4 billion of its existing debt and maintain its operations during the crisis and beyond.
The company has also secured $675 million in financing from creditors to support it through the bankruptcy process, from which it expects to emerge in the fall, according to a press release.
“We will emerge a far stronger company,” CEO Geoffroy van Raemdonck said in a statement. “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.”
Reports about Neiman filing for bankruptcy had swirled for weeks before it finally pulled the trigger. Van Raemdonck admitted that the pandemic put “inexorable pressure” on the company just as it was making progress toward long-term growth.
“We actually think it’ll survive,” Craig Johnson, president of Customer Growth Partners told The Post. “It’s a great brand. But luxury right now is in a very troubled state. Even people with money are spending less.”
The virus crisis has forced the retailer to close most of its Neiman Marcus, Bergdorf Goodman and Last Call stores through May 31, though 10 locations are open for curbside pickup. The company said it has also furloughed or cut pay for many of its roughly 14,000 employees through the end of the month.
Neiman said the bankruptcy process will not affect the timing of store reopenings, which it will implement based on the status of the pandemic.
Neiman’s bankruptcy filing is just the latest sign of how retailers are suffering from the coronavirus, which led to a record 8.7 percent drop in nationwide retail sales in March. JCPenney has also been considering bankruptcy to rejigger its finances and save money on debt payments.
