Neiman Marcus could permanently shutter some stores as it undergoes bankruptcy proceedings.
The luxury retailer, which filed for Chapter 11 protection just over two months ago, has moved forward with the marketing of four of its leases. The units are located in Walnut Creek, Calif.; the Mazza Gallerie mall in Washington, D.C.; Palm Beach, Fla.; and the Shops at Bravern in Bellevue, Wash.
“We are always assessing our store footprint to ensure it is optimal to enhance revenues, overall profitability and our omnichannel strategy,” a company spokesperson wrote in a statement to FN. “This ongoing assessment may include marketing of leases for certain locations.”
The spokesperson added, “This is not necessarily an indication that we are closing a particular store, but rather a way to monetize the value of the leases at these properties and allocate the proceeds toward investments that drive profitable and sustainable growth. Ongoing discussions with landlords are private and confidential.”
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Working on behalf of Neiman Marcus Group, A&G Real Estate Partners is marketing the department stores, which range from roughly 48,000 to 126,000 square feet. The spaces are situated in retail districts or shopping centers and offer long-term, multiple-option leases.
“These leases represent an incredible opportunity for retailers and investors to gain a foothold in markets that, under normal conditions, are renowned for their traffic and sales, as well as for their high barriers to entry,” A&G co-president Emilio Amendola said in a statement. “Additionally, some of these locations are particularly promising for conversion to hotel, office or residential use.”
Neiman Marcus, whose pressures have been years in the making, went bankrupt on May 7 amid weeks of speculation as the coronavirus pandemic forced the temporary closures of its Neiman Marcus, Last Call and Bergdorf Goodman banners across the country.
As part of its restructuring, the Dallas-based company has secured $675 million in debtor-in-possession financing to continue operations as it gradually reopens stores, invests in fall inventory and funds the expansion of its digital platforms. It could also end up trimming more of its portfolio of stores — including its three-level, 188,000-square-foot anchor space at The Shops and Restaurants at Hudson Yards, which opened to much fanfare in March 2019.
According to the filing, Neiman Marcus’ estimated assets are in the range of $1 billion and $10 billion, which is roughly on par with its estimated liabilities. Post-bankruptcy, it expects to eliminate $4 billion of debt, with no near-term maturities.
This story has been updated with a statement from Neiman Marcus.