Neiman Marcus Group filed for bankruptcy Thursday as the economic disruption caused by the coronavirus pandemic "placed inexorable pressure" on the luxury department store operator and claimed another corporate victim.
The privately held Dallas-based company said in a statement that it had entered into a restructuring support agreement with "a significant majority of its creditors" that will reduce its debt load and interest payments and support continued operations "during the Covid-19 pandemic and beyond."
The company said it commenced voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the Southern District of Texas in Houston.
Geoffroy van Raemdonck, chairman and CEO, said in a statement that "like most businesses today, we are facing unprecedented disruption caused by the Covid-19 pandemic, which has placed inexorable pressure on our business.”
The coronavirus outbreak forced the temporary closing of all 43 Neiman Marcus stores, as well as its two Bergdorf Goodman stores and Last Call outlets. Apart from the pandemic, the company was reportedly saddled with debt.
The company said it has secured $675 million in financing from its creditors to fund operations through bankruptcy and the creditors also committed to a $750 million exit financing package that would fully refinance the debtor-in-possession financing and provide additional liquidity for the business.
Upon emerging from bankruptcy, Neiman Marcus said it anticipates its planned capital structure to be long-dated with no near-term maturities and to eliminate about $4 billion of its existing debt.
Neiman Marcus said it expects to emerge from the process in early Fall 2020.
The company said that the temporary closures of some stores have been extended through May 31. Ten stores nationwide are now open for curbside pickup – all Texas Neiman Marcus stores, as well as Tampa, Las Vegas, and Tysons Corner stores.
Reuters reported late last month that Neiman Marcus was preparing to seek bankruptcy protection.
The coronavirus outbreak has sparked a wave of bankruptcies, as businesses' ability to operate is crippled by the economic shutdown. Retail clothing store operator J.Crew filed for bankruptcy protection on Monday.