The owners of department store chain Neiman Marcus are considering a sale of the company, among other options, as it struggles in an era of declining foot traffic and increased competition from online sellers.
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.
Many of retail's most iconic department stores are struggling to survive at a time when a growing number of consumers are choosing the ease of shopping online at 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.
Neiman Marcus may already have a potential buyer. Canadian company Hudson's Bay which had reportedly been considering a merger with Macy's, is now interested in acquiring Neiman Marcus instead, according to CNBC which cited 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 foot traffic. Now, Hudson's Bay is reportedly turning its attention to Neiman Marcus, which it would like to buy minus its $5 billion in debt, according to the CNBC report.
Neiman Marcus, which was purchased in 2013 by Ares Management and the Canada Pension Plan Investment Board, planned an initial public offering two years later to help pay down its $4.9 billion in debt, according to Reorg Research. But Neiman's owners formally withdrew its bid to go public in January, says Reorg.