Fashion

UPDATE: Neiman Marcus Officially Files for Bankruptcy

The company is $4.3 billion USD in debt.

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UPDATE: Neiman Marcus Officially Files for Bankruptcy

The company is $4.3 billion USD in debt.

UPDATE (May 7, 2020): Following initial reports on financial troubles plaguing department store Neiman Marcus, the luxury chain has officially filed for bankruptcy.

Last month, the coronavirus pandemic pushed the company to close all 43 of its Neiman Marcus stores across the U.S., as well as locations for its two subsidiaries Bergdorf Goodman and Neiman Marcus Last Call (an outlet). However, its problems preceded the health crisis — according to a report by The New York Timesthe company could not keep up with the amount of debt it took out as part of two leveraged buyouts by private-equity firms in 2013. In addition, its stores has been slow to adapt to the consumer shift to e-commerce.

Neither Neiman Marcus nor Bergdorf Goodman are likely to completely shutter. Rather, its predicted the company will use bankruptcy as an opportunity to close select locations, saving money and prime itself for acquisition by a potential buyer.

The announcement of Neiman Marcus’ plan closely follows the decision of J.Crew Group, which also operates Madewell, to file for Chapter 11 bankruptcy.


ORIGINAL STORY (March 25, 2020): According to a report by Bloomberg, luxury department store Neiman Marcus is considering filing for Chapter 11 bankruptcy. The 115-year-old retailer is reportedly in talks with lenders about a potential bankruptcy loan that would keep the company afloat as it figures out a plan to pay off its massive $4.3 billion USD debt.

Earlier this month, Neiman Marcus closed its stores in response to the global coronavirus pandemic. However, the company had been struggling well before the spread of COVID-19 due to a collective consumer shift to online shopping. The Neiman Marcus website remains open for business amid the current health crisis, and told Bloomberg that the company is working on a virtual “selling and styling tool” to assist with remote purchasing.

Back in August 2019, now-shuttered retailer Barneys voluntarily filed for Chapter 11 bankruptcy. The company is now owned by Authentic Brands Group LLC.

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