Tags: hudsons bay | neiman marcus | deal

Hudson's Bay, Neiman Marcus Deal Being Discussed, Sources Say

Image: Hudson's Bay, Neiman Marcus Deal Being Discussed, Sources Say

Top: Hudson's Bay Company, Vancouver, British Columbia. (Jerry Coli/Dreamstime.com) Bottom: Neiman Marcus exterior at Fashion Show Mall in Las Vegas. (Ken Wolter/Dreamstime.com)

By    |   Wednesday, 15 Mar 2017 12:36 PM

Hudson's Bay is in talks with Neiman Marcus owners about purchasing the retail chain, which could put it under the same umbrella as Saks Fifth Avenue and Lord & Taylor.

Neiman Marcus is owned by a private equity firm and has been buried under $5 billion in debt while suffering from slow sales, MarketWatch reported. It was purchased by Ares Management and the Canada Pension Plan Investment Board in 2013, CNBC noted.

Sources told MarketWatch that Hudson's Bay was looking for a deal where it could control the business without assuming the company's debt. The company could buy Neiman assets using a structure that would not trigger a change in control, leaving the debt on Neiman's books, one of the sources told MarketWatch.

CNBC reported that on Tuesday Neiman Marcus announced that it was looking into potential strategic alternatives that could include a sale of the company or other assets. The announcement came after a 6.8 percent decline in the retailer's comparable sales during the recently ended quarter, noted the broadcaster.

Neiman reported a total revenue decline of 6.1 percent during that period, to $1.4 billion, as it recorded adjusted earnings of $126.8 million. The company made a $183 million profit last year, CNBC noted.

"The company will conduct this evaluation with the assistance of financial advisors," Neiman Marcus said in a statement on its website Tuesday. "The company cannot provide assurance that the exploration of strategic alternatives will result in the completion of any transaction or other alternative, or regarding the possible terms or form of any such transaction or alternative.

"A timetable for the completion of the evaluation process has not been set and the company does not expect to comment further unless and until a specific transaction is approved by its board of directors or the company otherwise decides further disclosure is appropriate or required," the statement continued.

CNBC reported that in February S&P Global Ratings downgraded Neiman Marcus's corporate credit rating, stating that the retailer's capital structure was "unsustainable" long term. S&P pointed to Neiman's tumbling operating performance, including mid- to high-single-digit declines in same-store sales and "meaningful margin erosion," CNBC said.

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Hudson's Bay is in talks with Neiman Marcus owners about purchasing the retail chain, which could put it under the same umbrella as Saks Fifth Avenue and Lord & Taylor.
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2017-36-15
Wednesday, 15 Mar 2017 12:36 PM
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