The owners of Neiman Marcus are weighing whether to sell the famed department store chain as it struggles in an era of declining visits by shoppers -- and one potential buyer has already signaled its interest.
Neiman Marcus Group said in a statement that it is “undertaking a process to explore and evaluate potential strategic alternatives, which include the sale of the company or other assets.’’
The announcement came as the retail company reported a loss of $117.1 million in the quarter that ended Jan. 28, as compared to the $7.8 million profit the company eked out during the same three-month period a year earlier.
Neiman is among retail's most iconic department stores which are struggling to survive at a time when a growing number of consumers are choosing the ease of shopping online with Amazon, or gravitating toward the discounts and all-in-one shopping experience available at big box giants like Walmart. Sears announced in January that it would close 150 stores and sell its Craftsman tool brand, while Macy's closed 66 locations in its last fiscal year and is planning to close another 34 stores.
In the case of Neiman Marcus, a potential suitor has already appeared. Canadian retailer Hudson's Bay which had reportedly been considering a merger with Macy's, is now interested in acquiring Neiman Marcus instead, according to CNBC, citing sources who spoke to Dow Jones.
Hudson's Bay had been trying to secure funding to potentially purchase Macy's according to previous reports. But investors were hesitant about a deal that would anchor them in shopping malls which are seeing declining shopper visits. Now, Hudson's Bay is reportedly turning its attention to Neiman Marcus, which it would like to buy if it can find a way to deal with the chain's nearly $5 billion in debt, according to the CNBC report.
A company spokesperson for Hudson's Bay said that the retailer does not comment on rumors or speculation, but "generally speaking, as we have previously stated, we selectively evaluate opportunities to accelerate the company’s strategic growth while maintaining or enhancing its credit profile.''
Neiman Marcus, which was purchased in 2013 by Ares Management and the Canada Pension Plan Investment Board, planned an initial public offering in 2015 that would have helped to reduce the debt, according to Reorg Research. But in January, Neiman's owners formally withdrew their bid to go public, Reorg Research says.