Neiman Marcus considers sale in wake of financial woes

Neiman Marcus, which owns 42 stores in the United States, including in Boca Raton, Fla. (above), announced Tuesday it is considering selling the company. Photo by Neiman Marcus

March 15 (UPI) — High-end retailer Neiman Marcus announced Tuesday it is considering selling the company — possibly to rival Hudson Bay — in the wake of financial troubles.

Neiman Marcus announced it was exploring its strategic options after reporting a 6.1 percent drop in second-quarter revenue, which was $1.4 billion. The company posted a net loss of $117.1 million in the period, which includes a $153.8 million write down of its brand. One year earlier, it had reported a profit of $7.9 million for the quarter.

The company, which was acquired by private equity firms Ares Management L.P. and CPPIB in 2013, said it is working with financial advisers to review its financial situation. It said it didn’t have a timetable for completion of the evaluation.

Neiman Marcus is in talks to be acquired by Hudson Bay, which owns Saks Fifth Avenue and Lord & Taylor that would exclude its $5 billion in debt, The Wall Street Journal reported. Hudson also has had talks about acquiring another struggling retailer, Macy’s.

Neiman Marcus abandoned its plans for an initial public offering in January.

Standard & Poor’s also recently downgraded its credit rating on Neiman from B-minus to triple-C-plus, which is junk status.

“The company’s capital structure is unsustainable over the long term,” S&P said.

The company, which is based in Dallas, operates 42 Neiman Marcus stores, and owns two Bergdorf Goodman luxury stores in New York and 27 off-price Last Call clearance centers, according to its website.

Like many retailers, the company is facing the public’s shift from department stores and less mall traffic. Same-store sales fell 6.8 percent in the second fiscal quarter, which ended Jan. 28.

In an attempt to change its image, Neiman Marcus last year aligned with e-commerce startup Rent the Runway. The company has been opening in-store boutiques to let customers rent clothes and accessories.

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