Neiman Marcus has filed Chapter 11 and entered into a restructuring support agreement with a significant majority of its creditors to undergo a financial restructuring, substantially reducing its debt load and interest payments and supporting continued operations during the COVID-19 pandemic and beyond.
To implement the agreement, the retailer has commenced voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division.
As part of the process, Neiman Marcus Group has secured debtor-in-possession financing of $675 million from creditors to enable business continuity throughout proceedings. These creditors have also committed to fulfill a $750 million exit financing package that would fully refinance the DIP financing and provide additional liquidity for the business. The transaction is supported by the company’s existing shareholders and, pursuant to the agreement, the creditors participating will become the majority owners of the company.
Geoffroy van Raemdonck, chairman and CEO of Neiman Marcus Group stated, “Prior to COVID-19, Neiman Marcus Group was making solid progress on our journey to long-term profitable and sustainable growth. We have grown our unrivaled luxury customer base, expanded our industry-leading customer relationships, achieved higher omnichannel penetration, and made meaningful strides in our transformation to become the preeminent luxury customer platform. However, like most businesses today, we are facing unprecedented disruption caused by the COVID-19 pandemic, which has placed inexorable pressure on our business. My team and I appreciate the partnership and the steadfast support of all our stakeholders and board of directors through this process. The binding agreement from our creditors gives us additional liquidity to operate the business during the pandemic and the financial flexibility to accelerate our transformation. We will emerge a far stronger company. In a world that is changing, we are uniquely positioned to give our brand partners access to our loyal luxury customers like no other company. We will deliver that through the strength of our associate relationships and digital solutions.
The company expects to emerge from the process in early fall 2020.