By Rachel Abrams. Source: New York Times.
Neiman Marcus is in talks to sell itself to the Hudson’s Bay Company, the Canadian retail giant, according to a person briefed on the discussions. A deal would put the struggling high-end retailer under the same umbrella as its luxury rivals Saks Fifth Avenue and Lord & Taylor.
Hudson’s Bay had also been discussing a potential merger with Macy’s. Discussions with Neiman Marcus, however, appear to be a bit more serious, the person said.
In a statement, Hudson’s Bay said it did not discuss “market rumors.” But it added: “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.”
News of the potential acquisition was reported earlier by The Wall Street Journal.
As part of its most recent financial disclosure, Neiman Marcus said on Tuesday that it was evaluating its strategic options. Burdened by about $5 billion in debt and slumping sales, the retailer said that a potential sale was among the avenues being explored.
The company said it had not set a timetable to evaluate all of its options.
The disclosure highlights wider troubles at department stores, which have struggled to adjust as quickly as the rest of the retail industry to the new ways that people shop — increasingly online, and away from brick-and-mortar stores. Neiman Marcus, Macy’s and others have been unable to keep apace with Amazon, which has conditioned shoppers to expect low-cost goods delivered quickly.
Neiman Marcus abandoned its plans for an initial public offering in January. On Tuesday, it reported that revenue had fallen 6.1 percent in the most recent quarter.
The private equity firms Ares Management L.P. and CPPIB purchased Neiman Marcus in 2013. At the time, the company had largely stopped expanding into new markets, and was focused on growing its e-commerce business. The company operates 42 stores in the United States and two Bergdorf Goodman locations in Manhattan, according to its website.
Neiman Marcus has also suffered from the overall decrease in traffic at malls. The ratings service Standard & Poor’s cited that as one reason it downgraded Neiman Marcus’s credit rating to triple C-plus last month.