BY Fraser Tennant
Emerging from one of the highest-profile retail collapses during the coronavirus (COVID-19) pandemic, omnichannel fashion retailer Neiman Marcus Holding Company has completed its Chapter 11 protection process, having successfully implemented a plan of reorganisation.
Now operating with a strengthened capital structure that eliminated more than $4bn of existing debt and more than $200m of cash interest expense annually, Neiman Marcus emerges with the full support of its creditors and new equity shareholders.
“With the successful implementation of our restructuring, Neiman Marcus will continue to be the preeminent luxury shopping destinations for years to come,” said Geoffroy van Raemdonck, chief executive of Neiman Marcus Group. “While the unprecedented business disruption caused by coronavirus (COVID-19) has presented many challenges, it has also given us the opportunity to reimagine our platform and improve our business.”
The company’s new owners are funding a $750m exit financing package that fully refinances the debtor-in-possession (DIP) loan and provides significant additional liquidity for the business. Neiman Marcus has also secured a $125m ‘first-in, last-out’ (FILO) facility, the proceeds of which will refinance existing debt and provide liquidity to support the company's ongoing operations and strategic initiatives.
Furthermore, the exit term loan financing and FILO facility are in addition to liquidity provided by a $900m asset-based lending (ABL) loan. With the support of its new shareholders and funds available from the exit financing and FILO and ABL facilities, Neiman Marcus expects to be able to execute on the strategic initiatives to ensure a long and successful future.
“Our new owners understand the value of our brands and the opportunity for growth,” continued Mr van Raemdonck. “They are also strongly committed to supporting our company on sustainability issues – where we intend to be a leader within the industry. At the conclusion of this process, I remain profoundly impressed by the strength of Neiman Marcus, the commitment of our associates, the unwavering support of our brand partners, and the loyalty of our customers.”
Confident that Neiman Marcus is positioned to continue to transform the future of retail, Mr van Raemdonck concluded: “We emerge from Chapter 11 as a stronger, more innovative retailer, brand partner and employer.”
News: Department store chain Neiman Marcus emerges from bankruptcy