Neiman Marcus (USA) has filed for bankruptcy protection. The move will remove $4 billion of its almost $5 billion in debt during the reorganization.
It filed Thursday (May 7) in U.S. bankruptcy court in Houston and said it plans to emerge from bankruptcy in early fall.
The company’s Mytheresa operations based in Germany, which was the center of a bondholder lawsuit, is not part of the bankruptcy and will continue to operate independently.
The highly leveraged $6 billion buyout of Neiman Marcus by Ares Management LLC and the Canada Pension Plan Investment Board in 2013 put the company into a similarly risky position that, like Toys R Us, ended up in a bankruptcy filing.
Without its interest expense, which totaled more than $300 million a year, Neiman Marcus was profitable. Its last publicly reported results are a year old and were for the nine months ended April 2019. Neiman Marcus posted an operating profit of $128 million that was swallowed by its $245 million interest expense for the period.
