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Neiman Exits Bankruptcy. Now What?

Neiman Marcus can breathe a sigh of relief now that its tour of bankruptcy court is in the rearview mirror.

The company on Friday emerged from Chapter 11 proceedings under the newly reorganized name Neiman Marcus Holding Co. Inc., abandoning its former name, Neiman Marcus Group LTD LLC. The luxury department store received the full support of its creditors and new equity shareholders.

The new owners include PIMCO, Davidson Kempner Capital Management and Sixth Street. “They are also strongly committed to supporting our company on sustainability issues–where we intend to be a leader within the industry,” said CEO Geoffroy van Raemdonck.

As a reorganized firm, Neiman now has a strengthened capital structure, after eliminating over $4 billion of existing debt and over $200 million of cash interest expense annually. The retailer has no near-term maturities.

The new owners are also funding a $750 million exit financing package that provides significant additional liquidity for the business. In addition, Neiman also secured from Pathlight a $125 million loan known as a FILO facility, or first-in, last-out, in funding and payment. FILOs are supplements to senior loans, and once repaid cannot be re-borrowed. The proceeds from the FILO will “refinance existing debt and will provide liquidity to support the company’s ongoing operations and strategic initiatives,” the luxury chain said.

Both the exit financing and FILO are in addition to the $900 million asset-based loan led by Bank of America as part of a consortium of commercial banks.

“With the successful implementation of our restructuring, Neiman Marcus and Bergdorf Goodman will continue to be the preeminent luxury shopping destinations for years to come. While the unprecedented business disruption caused by Covid-19 has presented many challenges, it has also given us the opportunity to reimagine our platform and improve our business. We emerge from Chapter 11 as a stronger, more innovative retailer, brand partner, and employer,” van Raemdonck said.

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The luxury retailer also emerged from Chapter 11 with a newly constituted board of directors. Van Raemdonck continues to serve on the board. He’s joined by Meka Millstone-Shroff, who serves as a strategic operating advisor; Pauline Brown, the former chairman of North America for LVMH Moët Hennessy Louis Vuitton who has served on the boards of L Capital and several LVMH subsidiaries; Pamela Edwards, former CFO of Mast Global and the Victoria’s Secret division of L Brands; Kris Miller, most recently chief strategy officer for eBay, and Scott D. Vogel, managing member of Vogel Partners LLC.

Neiman, which filed its Chapter 11 petition in May, received bankruptcy court approval of its reorganization plan earlier this month.

Neiman on Thursday said it had begun cutting some selling and non-selling store associates as it prepared to exit Chapter 11 proceedings. But a spokesman for the retailer also emphasized that the company will be creating new jobs to better 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,” the spokesman said.