September spells a great turnaround for Neiman Marcus Group, who filed for Chapter 11 back in May. The company largely blamed its filing on the recent COVID-19 pandemic. However, the retailer looks to be coming out of it by Fall 2020. On Tuesday, Neiman Marcus was approved in accessing debtor-in-possession loans (DIP) by the Southern division of Texas bankruptcy court. $250 million will be made immediately available to the company with $150 million additionally added after September 4th.
Geoffroy van Raemdonck, chairman and chief executive officer of Neiman Marcus Group, had said in a statement that 90% of Neiman Marcus stores are still open for curbside pickup, shopping, and private appointments “to some degree.”
“This financing provides us with ample liquidity to ensure business continuity as we gradually reopen our stores, invest in fall inventory, and fund the expansion of our digital offerings as we continue our journey to become the preeminent luxury customer platform,” said van Raemdonck in the statement. “Importantly, we remain on track to emerge from this process in fall 2020.”
"With the approval from the court to fully access the significant DIP financing we have secured from our creditors, we are well positioned to continue to serve our customers and global luxury brand partners," continued Geoffroy van Raemdonck.
van Raemdonck also commented on the positive uptick of recent sales. “With our digital stylists and remote selling capabilities, our associates have continued to engage with and support customers anytime, anywhere, driving significant sales even while remote.”
According to Jeffrey Cohen, vice-chair of Lowenstein Sandler’s bankruptcy department, the approval of the $250 million was "a very necessary accomplishment.”
“They are taking their next step towards either a plan of reorganization or a sale," Cohen continued. "Without the funding to pursue either of those paths, it's game over. You don't have the ability to stay operating long enough in Chapter 11 unless you have the requisite funding. That was a necessary hurdle for them to clear.”
van Raemdonck also stated that Neiman Marcus will have $5 billion less debt as well as no near-term maturities after bankruptcy.