A Texas oil boom turned a single Neiman Marcus department store in downtown Dallas into one of America’s biggest luxury retailers. A century later, the new coronavirus tipped the heavily indebted company into a bankruptcy court, WSJ Pro Bankruptcy reported. Neiman Marcus Group Inc. yesterday filed for chapter 11 bankruptcy protection in Texas, becoming the latest large retailer to seek a court restructuring during the pandemic that has closed much of the U.S. economy. “We had a business that was on track prior to Covid-19,” Neiman Marcus Chief Executive Geoffroy van Raemdonck said in an interview. “Everything was going well in our transformation, but we had massive interest payments. Covid threw everything off track. This is an opportunity to reset our financial structure.” Other retailers that were struggling before state and local government mandates on social distancing forced businesses to close their doors are teetering, too. Neiman’s bankruptcy filing, in the Southern District of Texas, Houston Division, seeks to eliminate $4 billion of roughly $5.1 billion in debt. The creditors will become majority owners of the retailer, which has been controlled by private-equity firms. Neiman isn’t planning mass store closings or asset sales as part of the restructuring. Neiman has secured $675 million debtor-in-possession financing from creditors holding over two-thirds of the company’s debt. The creditors have also committed to $750 million in exit financing that would refinance the DIP and provide additional funding for the business.
