NEW YORK (AP) — Neiman Marcus, the 112-year-old storied luxury department store chain, is seeking Chapter 11 bankruptcy protection.
It is the first department store chain and second major retailer to be toppled by the coronavirus pandemic.
“Prior to COVID-19, Neiman Marcus Group was making solid progress on our journey to long-term profitable and sustainable growth," Geoffroy van Raemdonck, Chairman and Chief Executive Officer of Neiman Marcus Group stated in a press release. We have grown our unrivaled luxury customer base, expanded our industry-leading customer relationships, achieved higher omni-channel penetration, and made meaningful strides in our transformation to become the preeminent luxury customer platform. However, like most businesses today, we are facing unprecedented disruption caused by the COVID-19 pandemic, which has placed inexorable pressure on our business.”
As part of the bankruptcy filing, Neiman Marcus says it has secured $675 million in financing from creditors to keep operating during the restructuring, holding over two-thirds of the company's debt.
“My team and I appreciate the partnership and the steadfast support of all our stakeholders and Board of Directors through this process. The binding agreement from our creditors gives us additional liquidity to operate the business during the pandemic and the financial flexibility to accelerate our transformation. We will emerge a far stronger company. 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. We will deliver that through the strength of our associate relationships and digital solutions,” van Raemdonck said.
The Dallas-based company operates 43 stores and expects to emerge from bankruptcy by this coming fall.
A company spokeswoman said no mass closings are planned.
The filing comes as department stores were already in a weakened state.
The retailer also stated in the press release that creditors had committed to fulfill a $750 million exit financing package that would refinance the debtor-in-possession.
Now, the coronavirus pandemic is putting them further in peril.