Coverage: Neiman Marcus takes down For Sale sign

Retailer Neiman Marcus has decided to take itself off the selling block after exploring options to find a buyer.

Maria Halkias of the Dallas Morning News had the news:

After announcing the company was considering a sale in March, Neiman Marcus chief executive officer Karen Katz told analysts during a conference call Tuesday that “any conversations regarding a partial or full sale of the company have terminated.”

Katz, a 30-year-veteran of the company, later said in a statement that the decision was made to remain an independent company.

“We have stopped all discussions regarding the sale of Neiman Marcus, either partially or fully, so that we can focus on our stand-alone strategy, which we believe represents the best potential for creating maximum shareholder value,” she said.
Also asked about any individual asset sales as opposed to looking for a buyer of the company, Katz repeated, “any conversations are terminated and not happening.”

In March, Neiman Marcus said it was considering a sale and hired investment banking firm Lazard Ltd. Since then, and even before Neiman’s terminated plans for an IPO last year, there were reports of talks with Canada-based Hudson’s Bay Co., which bought Saks Fifth Avenue in 2013 and owns Lord & Taylor. There were also reports from unnamed sources that international buyers might be interested, or that New York-based real estate developer Related Cos. might be buying an ownership stake in the company.

Anne D’Innocenzio of the Associated Press reported that the retailer plans to focus more on exclusive merchandise:

Katz says the fact that Neiman Marcus has only 42 stores in addition to its Bergdorf Goodman store sets it apart from the mega-department store chains. “We know our customers very well,” Katz told The Associated Press.

Furthermore, 30% of its business is online now.

Neiman Marcus plans to use technology to better personalize its offers online and in the store. A year ago, it beefed up its analytics team so shoppers can walk into the store and sales people with mobile devices can check what they bought and searched for on the website.

Online, shoppers are seeing a more personalized site that highlights items the person had searched for in the past. Neiman Marcus is also offering more targeted emails to shoppers. Neiman Marcus says that 75% of its customers receive a custom digest of emails, which is a key driver of traffic.

Neiman Marcus has also launched high-profile exclusive merchandise with limited availability or distribution. That includes a Nike and Riccardo Tisci collaboration at Bergdorf Goodman, and a social media campaign with influencers like Bella Hadid and Victor Cruz. The company said it sold out the entire collection in a matter of days. Bergdorf Goodman also had a partnership with the Lady Dior Art bag and the Chloe Nile handbag. Katz also noted Neiman Marcus and Bergdorf Goodman were the only retailers to show and promote Chanel’s new bag, the Gabrielle, on a dedicated online landing page. While shoppers could not buy on the website, it did draw its customers to stores.

Lisa Fickenscher of The New York Post reported the retailer’s issues include debt:

Neiman, struggling under a swelling debt load, hired investment bank Lazard to look for ways to bolster its balance sheet, Reuters reported in March, as the company continued to struggle with lackluster demand in the face of stiff competition from Amazon and fast-fashion retailers such as H&M and Zara.

Much of Neiman Marcus’s debt load stems from its $6 billion leveraged buyout in 2013, when its current owners, Ares Management and Canadian public pension fund CPPIB, acquired it from other private equity firms.

Neiman Marcus, which also owns the Bergdorf Goodman stores on Fifth Avenue, had total liabilities of $6.4 billion, including $1.2 billion of deferred income taxes according to its latest annual filing.

While “the promotional environment remains intense” Katz said, sales of handbags, jewelry, men’s products and sneakers have contributed to improved performance in May.

Earlier this year Dallas-based Neiman Marcus also shelved plans for an initial public offering.