Neiman Marcus Reported Second Quarter Earnings, Exploring Potential Strategic Alternatives
- Author: Anthony Vega Mar 15, 2017,
Mar 15, 2017, 0:42
For the second quarter, Neiman Marcus reported revenue of $1.4 billion, down from $1.49 billion, or 6.1 percent, in the year-ago period. These trending losses also contributed to the company scrapping its plans to pursue an initial public offering.
The chain known for its lavish holiday catalog was bought by Ares Management LLC and the Canada Pension Plan Investment Board in 2013.
Neiman Marcus Group, amid declining sales and earnings, is exploring "strategic alternatives" which may include the sale of the company or other assets, as well as other initiatives to improve its capital structure. Canadian company Hudson's Bay which had reportedly been considering a merger with Macy's, is now interested in acquiring Neiman Marcus instead, according to CNBC which cited sources who spoke to Dow Jones.
Neiman Marcus says it has not set up a timetable for completing its evaluation. Hudson also has had talks about acquiring another struggling retailer, Macy's.
Earlier this month, U.S. rating agency Standard & Poor's downgraded Neiman's corporate credit rating from B minus to triple C plus, pushing it deeper into junk territory with a negative outlook, while noting that the company's "capital structure is unsustainable over the long term".
Neiman Marcus is one of a number of department stores that have run into financial problems in recent years as more and more consumers embrace online shopping.
Comparable sales dropped 6.8% in the second quarter.
In an attempt to change its image, Neiman Marcus a year ago aligned with e-commerce startup Rent the Runway.
The company, which is based in Dallas, operates 42 Neiman Marcus stores, and owns two Bergdorf Goodman luxury stores in NY and 27 off-price Last Call clearance centers, according to its website.