Neiman Marcus filed for bankruptcy protection (known as Chapter 11), adding himself to the list of department stores that fell out of favor during the pandemic.
Neiman Marcus Group LTD LLC reported in a statement that the board of directors approved a financial restructuring to reduce its debts and interest payments, as well as trying to maintain affected operations during the COVID-19 pandemic.
“As part of the process, Neiman Marcus Group has secured $ 675 million in financing following an agreement with creditors to allow for business continuity over the long term,” the note said.
The company’s chief executive officer, Geoffroy van Raemdonck, indicated that “the binding agreement of our creditors gives us additional liquidity to operate the business during the pandemic and financial flexibility to accelerate our transformation. We will re-emerge as a much stronger company” .
As part of the aforementioned restructuring agreement, creditors have also committed to complying with a $ 750 million financing package and the company expects to exit the process in the early fall of 2020.
The Mytheresa brand is not part of the Chapter 11 procedure and will continue to operate independently.
Neiman Marcus Group also provided an update on the following actions to efficiently manage their business through the COVID-19 pandemic:
• Temporary closings of some Neiman Marcus, Bergdorf Goodman and Last Call stores have been extended until May 31 to protect the health and safety of customers and associates.
• The Company continues to leverage the strength of its e-commerce platforms, and continues to serve customers remotely and digitally through its associates and style consultants.
• Suspensions without pay or temporary salary reductions have been made for a large part of the employees until at least May 31, with the potential to expand or cut these measures depending on what happens with COVID-19.
• A total of 10 stores nationwide are now open for pick-up at the door: all Neiman Marcus stores in Texas, as well as stores in Tampa, Las Vegas, and Tysons Corner stores.
• The company will continue to evaluate store closure decisions and reopen stores as it is safe to do so based on the state of the pandemic.
The Chapter 11 process would not impact the process of reopening stores.