Neiman Marcus emerges from Chapter 11

United States
Published:  05 October, 2020

The high-end department store chain announced on September 25 that it has emerged from voluntary Chapter 11 protection, hence, successfully completing its restructuring process and implementing the Plan of Reorganisation that was confirmed by the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division on September 4, 2020.

Neiman Marcus said it emerges from Chapter 11 with the full support of its creditors and new equity shareholders, now operating with a strengthened capital structure that eliminated more than US$4 billion of existing debt and more than US$200 million of cash interest expense annually, with no near-term maturities. “With the successful implementation of our restructuring, Neiman Marcus and Bergdorf Goodman will continue to be the preeminent luxury shopping destinations for years to come. While the unprecedented business disruption caused by Covid-19 has presented many challenges, it has also given us the opportunity to reimagine our platform and improve our business. We emerge from Chapter 11 as a stronger, more innovative retailer, brand partner, and employer”, said Geoffroy van Raemdonck, Chief Executive Officer, Neiman Marcus Group.

The new owners, which include PIMCO, Davidson Kempner Capital Management and Sixth Street, are to fund a US$750 million exit financing package that fully refinances the debtor-in-possession loan and provides significant additional liquidity for the business. The Company said it has also secured a US$125 million FILO facility led by Pathlight, the proceeds of which refinance existing debt and are to provide liquidity to support the Company’s ongoing operations and strategic initiatives. The exit Term Loan financing and FILO facility are in addition to the liquidity provided by the US$900 million ABL led by Bank of America and a consortium of commercial banks.

“With the support of its new shareholders and funds available from the exit financing, FILO facility, and ABL facility, we expect to be able to execute on the strategic initiatives to ensure a long and successful future for Neiman Marcus”, said the company in a statement.