US luxury department store chain Neiman Marcus said on Tuesday that it has hired advisers to explore strategic alternatives including a sale of the company or its assets.
Hudson’s Bay, the Canadian-department store behind luxury names like Saks Fifth Avenue, is reportedly in discussions to buy Neiman, the WSJ reported. The company had previously approached Macy’s but the deal was reported to have stalled after Hudson’s failed to secure equity financing for the deal.
Earlier this month, US ratings agency Standard & Poor’s downgraded the department store operator’s corporate credit rating to ‘CCC+’ from ‘B-’, pushing it deeper into junk territory with a negative outlook, while noting that the company’s “capital structure is unsustainable over the long term”.
The Texas-based department store, which operates Bergdorf Goodman, was first taken private by TPG Capital and Warburg Pincus for $5.1bn in 2005. It was sold again to private-equity firm Ares Management and Canada Pension Plan Investment Board for $6bn in 2013. In January, the company pulled its plans for an initial public offering which it first filed in August 2015.
Neiman said on Tuesday that there was no guarantee the process would result in the completion of a transaction.
The news came as the company swung to a loss in the fiscal second quarter. Neiman reported a net loss of $117.1m, compared with a profit of $7.9m in the prior year quarter.
Revenues declined 6.1 per cent to $1.4bn, while like-for-like sales, a key metric, slid 6.8 per cent.