The 112-year-old, Dallas-based luxury retailer Nieman Marcus Group filed for bankruptcy Thursday in the US Bankruptcy Court for the Southern District of Texas in Houston. At the time of filing, Nieman Marcus said it has “funded-debt obligations of approximately $5.5 billion.”
The filing stated that the need for bankruptcy comes in the “face of unprecedented global COVID-19 pandemic.” The company also made clear that this is not a liquidation, but a restructuring and that it had already obtained financial commitments from key stakeholders to allow it to meet its post-petition obligation and beyond. Nieman Marcus Group includes several brands with 67 locations and online stores including, Nieman Marcus, Bergdorf Goodman, Last Call and Horchow. The flagship Nieman Marcus location was opened in Dallas, Texas, in 1907.
Nieman Marcus’s bankruptcy filing comes just days after J.Crew Group’s bankruptcy filing. The J.Crew Group featured the J.Crew and Madewell brands known for their mid-tier, preppy retailers.
Both Nieman Marcus and J. Crew were struggling recently, but had gone through executive transitions and were seeing signs of progress prior to the COVID-19 pandemic. Additionally, both groups were recently purchased in leveraged buyouts by private equity companies that saddled them with significant debt obligations.
While these are the first retail bankruptcies since the COVID-19 pandemic, they are unlikely to be the last. As the Wall Street Journal reported, J.C. Penney Co. skipped a $17 million interest payment on Thursday after skipping a $12 million interest payment in April. Additionally, Macy’s and Gap are hoping that reopening stores this month will help their falling revenues. Traditional retailers have taken significant hits during the pandemic, while massive e-commerce site Amazon continues to make gains.
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