Bankrupt Neiman Marcus Group is getting rid of jobs before it exits Chapter 11.
“Neiman Marcus Group is now in a much stronger financial position than we were prior to our Chapter 11 restructuring. NMG will emerge with substantially reduced debt, one of the best capital structures among multi-retailers, and enhanced financial flexibility. We are evaluating every part of our business to ensure that the company is positioned for long-term success,” a spokesman said, declining to specify the number of jobs cut, which is said to be sizable. “On Sept. 23, we began a reorganization of our Neiman Marcus and Bergdorf Goodman store associate structure. We plan to separate from selling and non-selling associates. These are difficult decisions we must make at this time and we are so grateful for our dedicated store associates.”
In addition to store associate layoffs, the job cuts are expected to include staff from restaurants and bars that operate inside the stores that are closed due to social-distancing protocols. The employer of roughly 12,000 furloughed some staff at the start of the Covid-19 pandemic. But even with many stores reopening, foot traffic has been slow as shoppers turned their attention from brick-and-mortar to online purchases.
Despite the layoffs, the spokesman noted that new jobs are being created as the retailer adds more service positions to meet customer needs.
“We are also rolling out new positions, including service ambassadors, digital client advisors, and personal stylists, to better serve our customers at Neiman Marcus. This is reflective of our unique integrated retail experience as we continue our path to be the preeminent luxury customer platform,” he said.
Earlier this month, a bankruptcy court confirmed Neiman’s reorganization plan. The retailer is days away from emerging from Chapter 11 bankruptcy court protection.
As part of its restructuring, the luxury department store is shutting at least 20 stores, including its new Manhattan flagship at Hudson Yards. The restructuring also allowed it wipe out roughly $4 billion in pre-petition debt, with no near-term maturities.
The company will exit with its existing management team in place, and Geoffroy van Raemdonck continuing in his role as chairman and CEO.
The headcount reduction at Neiman follows recent announcements by Brookfield Properties, which is cutting 400 jobs from its 2,000-member retail division workforce, Kohl’s 15 percent cuts, and Ralph Lauren, which is shedding 3,600 jobs.