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Neiman Marcus to to file for bankruptcy due to pandemic

By REY ROBES ILAGAN

With the looming global economic impact of Covid-19, companies big or small have been pushed to the limits in keeping their business afloat. Neiman Marcus, the American chain of luxury department stores, is preparing to seek bankruptcy protection due to the coronavirus outbreak, according to Reuters. The move will happen as early as this week, with the company becoming the first major US department store chain owner to succumb to the economic fallout from the pandemic.

Over the years, Neiman Marcus has accumulated borrowings totaling $4.8 billion, according to American credit ratings agency Standard & Poor’s. Analysts have assessed that the retailer is in its final stages of negotiating a loan to sustain operations during the bankruptcy proceedings. Neiman Marcus has already furloughed most of its 14,000 employees, and temporarily shut all 43 locations, plus two dozen Last Call outlets and two Bergdorf Goodman stores in New York.

“In light of the significant headwinds stemming from the coronavirus pandemic, and our expectation for a US recession this year, we believe the company’s prospects for a turnaround are increasingly low,” wrote Standard & Poor’s analysts in a note.

The moment Neiman Marcus files for bankruptcy could attract interest from potential financial suitors to pick up the company from its current state. In 2017, Hudson’s Bay Co., owner of Saks Fifth Avenue, explored a bid for Neiman Marcus, but the negotiations were halted according to reports.

Based in Dallas, Texas, Neiman Marcus—founded by Herbert Marcus, Carries Marcus Neiman, and Abraham Lincoln Neiman—first opened its doors in 1907 with opulently furnished interiors stocked with pieces of clothing not typically found in the state. Within a few weeks of opening, the store’s initial inventory was completely wiped out thanks to its core customer base of oil-rich Texans. In 1972, the Neiman Marcus Group acquired the American luxury department store Bergdorf Goodman as part of its expansion plans. Today, the Marcus Neiman Group is owned by Ares Management and the Canada Pension Plan Investment Board through a deal done in October 2013 with a price tag of $6 billion.


Source: Manila Bulletin (https://lifestyle.mb.com.ph/2020/04/21/neiman-marcus-to-to-file-for-bankruptcy-due-to-pandemic/)

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