The coronavirus has pushed Neiman Marcus to the purpose of chapter, the primary main retailer within the U.S. to topple as a result of pandemic, in response to a Sunday (April 19) report by Reuters, citing sources.
Already saddled with debt, Neiman Marcus was compelled to shutter all 43 of its places, together with greater than 20 of its Final Name shops and two of its Bergdorf Goodman retailers. Bloomberg reported in March that the corporate was mulling chapter as a strategy to ease its $4.three billion in debt. Most of its 14,000 workers are at present furloughed.
The sources advised Reuters that the timing of the chapter submitting just isn’t outlined however “might come inside days.”
“In mild of the numerous headwinds stemming from the coronavirus pandemic and our expectation for a U.S. recession this yr, we consider the corporate’s prospects for a turnaround are more and more low,” Customary & Poor’s analysts wrote in a notice final week, as reported by Reuters.
Analysts dropped the credit standing on Neiman Marcus as “junk” and mentioned the transfer mirrored the “elevated potential” of a debt restructuring.
Amongst different shops, Macy’s and Nordstrom are on the lookout for new financing. Already on the verge of chapter, J.C. Penney is contemplating shifting ahead to “rework its unsustainable funds,” Reuters mentioned in a report final week.
The primary Neiman Marcus retailer was opened in Dallas, Texas, by the Marcus and Neiman households in 1907. The corporate acquired New York Metropolis’s Bergdorf Goodman in 1972.
The coronavirus outbreak has pushed the corporate to the brink. Whereas it has requested some employees again to closed shops to meet on-line orders, these operations can’t make up for misplaced gross sales in bodily shops.
“Retail has hung a closed signal on the door actually and metaphorically,” Neil Saunders, managing director of GlobalData Retail, advised the Associated Press. “That is essentially the most catastrophic disaster that retail has confronted — worse than the monetary disaster in 2008, worse than 9/11. Nearly in a single day, the retail financial system shifted from being about issues individuals wish to issues that they want.”
Earlier this month, Neiman Marcus began to organize itself for possible bankruptcy. The luxurious division retailer retailer reportedly began having personal discussions with bondholders concerning potential financing that might help it with ongoing operations throughout chapter safety.