On Thursday May 7th Neiman Marcus has declared and filed for Chapter 11 bankruptcy protection, and became the biggest U.S fashion retailer to fall to it’s knees from the Covid-19 pandemic economic fall out. According to a current financial statement made public, the high end fashion retail chain was doing about $5 billion in yearly sales. “facing unprecedented disruption caused by the COVID-19 pandemic, which has placed inexorable pressure on our business,” Geoffroy Van Raemdonck CEO said in a statement according to CBS News.
Neiman Marcus plans to come out of bankruotcy by the fall of 2020. “The binding agreement from our creditors give 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.” The CEO also said in a statement.
Neiman Marcus Inc. has for years been operating and juggling with an unsustainable capital structure. Back in 2013 when the company was acquired by Ares and the Canadian Pension plan Investment which paid a ridiculous amount of money for the buyout, and burdened the company with an enormous amount of debt (sound familiar?), filing for bankruptcy was only a matter of time. However Neiman Marcus appears to have what it take takes to weather the storm, even if it means merging with Saks Fifth Ave. Let’s hope that the economic climate doesn’t get any worse (or thrown another curve ball) or Neiman Marcus Inc. and others like J Crew and Gap Inc. could go the way of “United Colors of Benetton” (remember them?) the Elegant Classy Gentleman Magazine will keep you updated as events unfold.