Neiman Marcus nears lending deal
Neiman Marcus Group Inc. is closing in on a deal with lenders led by Pacific Investment Management Co. that would slash the department-store chain’s debt load by more than half in exchange for control of the company, according to people with knowledge of the matter.
The plan would be part of a bankruptcy court filing that could come as soon as this week, the people said. Lenders including PIMCO, Davidson Kempner Capital Management and Sixth Street Partners would provide the company with more than $600 million to stay in business during the court process, said the people, who asked not to be identified because the discussions are private. Those lenders and others would swap their debt for equity in the reorganized company.
Neiman has struggled for years to find its footing as traffic fell at malls and department stores. The Dallas-based company reached a deal with creditors last year that bought it time for a turnaround. But with its stores shuttered since March by the COVID-19 pandemic, efforts to cut its more than $4.3 billion of debt took on a new level of urgency.
Neiman, which is owned by Ares Management Corp. and the Canada Pension Plan Investment Board, is among a number of retailers with heavy debt loads that are now threatening to be toppled by the pandemic.
Preppy apparel retailer J. Crew Group Inc. filed for bankruptcy on Monday with plans to hand control to its lenders. J.C. Penney Co. has been in talks with its lenders after skipping an April 15 bond interest payment.
Neiman Marcus, for now, intends to maintain most of its stores through the restructuring, the people said. Some could later be closed after additional reviews of their performance, they said.