Neiman Marcus Group, whose department store locations include the Neiman Marcus store at The Westchester in White Plains, has filed for Chapter 11 bankruptcy protection.
The company said in a statement that it entered into a restructuring support agreement with a significant majority of its creditors before the filing that would allow a substantial reduction in its debt load and interest payments while operations continue.
Neiman Marcus said it has secured debtor-in-possession financing of $675 million from its creditors to enable business continuity while the bankruptcy proceeding unfolds. It filed in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division.
In a letter to customers, Chairman and CEO Geoffroy van Raemdonck said, “This is simply a process that allows our company to alleviate debt, access additional capital to run the business during these challenging times, and emerge a stronger company with the ability to better serve you and continue our transformation over the long term.” He said that customers should not notice any changes as a result of the bankruptcy filing.
Van Raemdonck said, “The binding agreement from our creditors gives us additional liquidity to operate the business during the pandemic and the financial flexibility to accelerate our transformation.”
Neiman Marcus said that when it emerges from bankruptcy it anticipates having eliminated approximately $4 billion of its existing debt. It said that it expects to emerge from the process in early fall of this year.
The company said that the existing shareholders support what is being done and that creditors participating in the restructuring will become the majority owners of the company.
Neiman Marcus Group said the temporary closures of its Neiman Marcus, Bergdorf Goodman and Last Call stores have been extended through May 31. It said that 10 of its stores nationwide are now open for curbside pickup and two others are allowing customers in by private appointment.
The Neiman Marcus store at The Westchester in White Plains remains closed because of the state’s restrictions on business operations due to COVID-19, as does the mall itself. Simon Property Group, operator of The Westchester, has backtracked from an announcement that showed The Westchester being scheduled to reopen on May 16. Simon now says The Westchester will remain closed along with its other properties in New York state until state restrictions are lifted.