Neiman Marcus Holding Co said on Friday it has completed its Chapter 11 bankruptcy protection process, emerging from one of the highest-profile retail collapses during the COVID-19 pandemic.
Its restructuring plan eliminated more than $4 billion of debt and $200 million of annual interest expense.
The luxury department store chain said it had a new board of directors, including former LVMH North America Chairman Pauline Brown and former eBay Inc Chief Strategy Officer Kris Miller.
Geoffroy van Raemdonck will continue to serve as Chief Executive Officer of Neiman Marcus Group, which had filed for bankruptcy protection in May.
The 113-year-old company’s new owners, which include PIMCO, Davidson Kempner Capital Management, and Sixth Street Partners LLC are funding a $750 million exit financing package that fully refinances its debtor-in-possession loan.
Neiman Marcus filed for Chapter 11 bankruptcy protection on May 7, 2020, casting a shadow over other retailers as they remain shuttered during the coronavirus pandemic.
The move was done in “supporting continued operations during the COVID-19 pandemic and beyond,” according to the Dallas, Texas-based luxury retailer. The firm blamed the lack of revenue on the virus pandemic, saying it was on a profitable path before it unfolded.
Neiman Marcus isn’t the first major department store group to file for bankruptcy during the pandemic. A growing list of mostly clothing retailers have filed for Chapter 11, including Brooks Brothers, J.C. Penney, J.Crew, and Stage Stores. These retailers were already struggling with weak sales, but the forced closure of non-essential stores in March to reduce the spread of the coronavirus put them further in peril.
Many retailers, including big and small companies, have filed for Chapter 11 bankruptcy so far this year, exceeding the number of retail bankruptcies for the entire 2019 year. That’s according to S&P Global Market Intelligence. Shoppers are cautious about going out for safety reasons, given surges in new cases around the country. And they’re also worried about their finances.