Less than a week before it expects to emerge from bankruptcy, Neiman Marcus Group has confirmed that it would lay off an unspecified number of employees.
In a statement to FN, a spokesperson wrote that the Dallas-based company yesterday “began a reorganization” of the “store associate structure” at both its namesake department store and Bergdorf Goodman outposts.
“We plan to separate from selling and non-selling associates,” the spokesperson said. “These are difficult decisions we must make at this time, and we are so grateful for our dedicated store associates.”
Along with the announcement, Neiman Marcus Group shared that it also planned to roll out new positions, including service ambassadors, digital client advisors and personal stylists at its locations.
“This is reflective of our unique integrated retail experience as we continue our path to be the preeminent luxury customer platform,” added the spokesperson.
Early this month, a judge in the United States Bankruptcy Court for Southern District of Texas’ Houston Division approved the high-end retailer’s debt-for-equity swap, which hands ownership of the chain to creditors in exchange for eliminating the majority of its borrowings.
As part of the plan, Neiman Marcus Group expects to slash more than $4 billion of nearly $5.5 billion in existing debt and more than $200 million of interest expenses, with no near-term maturities. In addition, certain institutional investors will fund a $750 million exit financing package that would fully refinance its debtor-in-possession loan and provide additional liquidity for its business.
“Neiman Marcus Group is now in a much stronger financial position than we were prior to our Chapter 11 restructuring,” the spokesperson told FN today. “Neiman Marcus Group 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.”
The retailer filed for bankruptcy in the first week of May as the coronavirus pandemic forced the temporary closures of its Neiman Marcus units, as well as its Last Call and Bergdorf Goodman stores across the country. Its pressures, however, have been years in the making, as it struggled in the face of digital disruption and reduced foot traffic.