Neiman leaves bankruptcy with less debt to face turmoil

Bloomberg

Neiman Marcus has officially come out of bankruptcy, a process that left the upscale department store with a lighter debt load and new owners to confront the same industry trends that led to its financial woes.
The new Neiman Marcus Holding Company Inc emerged from Chapter 11 bankruptcy protection, saying it had eliminated more than $4 billion of existing debt. Also gone are the stakes once held by Ares Management Corp and the Canadian Pension Plan Investment Board, who piled on debt as part of a 2013 leveraged buyout. The Dallas-based company is now owned owned by Pacific Investment Management Co, Davidson Kempner Capital Management and Sixth Street Partners.
With the financial cleanup completed, Neiman Marcus and its Bergdorf Goodman store
still must deal with the pandemic’s fallout, shopper defections to online merchants and a preference among younger customers for experiences instead of objects.
Mike Campellone, an analyst with Bloomberg Intelligence, said the current environment for a fashion luxury retailer isn’t ideal. “The bankruptcy process did help reduce the company’s debt load — but there’s still a lot more to play out in terms of where the luxury apparel space is headed,” he said.
The company was hit particularly hard by the pandemic. Neiman’s stores across the US were closed and workers were furloughed to help stop the spread of the coronavirus,
although locations have gradually started to reopen. The company filed for court protection in May.
The new owners “understand the value of our brands and the opportunity for growth,” said a statement from Geoffroy van Raemdonck, the chief executive officer who kept his position during the bankruptcy process and will now lead the turnaround effort.
Some of Neiman’s creditors and retail peers couldn’t say the same. Lord & Taylor has been running going-out-of business sales and Stein Mart is being dismantled. Marble Ridge Capital, a creditor that peppered Neiman Marcus with objections to its debt maneuvers before and after the bankruptcy filing, is being wound down after co-founder Dan Kamensky’s tactics drew criminal charges.