Neiman Marcus becomes first department store to file for bankruptcy in coronavirus pandemic after debt struggles
NEIMAN Marcus has become the first department store to file for bankruptcy during the coronavirus pandemic.
The group filed for bankruptcy protection on Thursday, marking one of the highest-profile collapses yet among retailers forced to temporarily close stores in response to COVID-19.
“Like most businesses today, we are facing unprecedented disruption caused by the COVID-19 pandemic, which has placed inexorable pressure on our business,” Chief Executive Officer Geoffroy van Raemdonck said.
“The binding agreement from our creditors gives 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.”
Neiman, which filed for bankruptcy in a Houston federal court, said it reached agreement with creditors for $675 million of debtor-in-possession financing to aid operations while it attempts to reorganize.
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Dallas-based Neiman Marcus also said it would cede control to creditors under the agreement that will eliminate $4 billion of debt. Its debt currently totals about $5 billion.
The nearly 113-year-old company in March furloughed many of its roughly 14,000 employees and temporarily closed all its 43 Neiman stores, two Bergdorf Goodman locations in New York and roughly two dozen Last Call stores.
More to follow…
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