[Editor’s Note: This story has been updated with a comment from Neiman Marcus Group]
Neiman Marcus has reportedly been talking with lenders about filing for bankruptcy, people familiar with the matter told Bloomberg. No formal decisions have been made, but the luxury retailer has reportedly held initial discussions regarding a potential bankruptcy loan that would keep it running while the company works to ease its $4.6 billion debt load.
“Most businesses today are facing some degree of disruption from the unprecedented global economic environment resulting from the COVID-19 pandemic,” said a Neiman Marcus Group spokesperson in a statement. “We are evaluating all courses of action to preserve our financial strength so that we may continue serving our customers and associates, and being a great partner to luxury brands globally. Our priority has been and will always be to ensure stability for our associates and brand partners.”
Like many other retailers, Neiman Marcus has temporarily closed its stores in response to the COVID-19 pandemic. This is in addition to the upcoming permanent closure of most of the retailer’s off-price Last Call stores, which are scheduled to shut down as part of an emphasis on full-price sales.
Despite these setbacks, the plans for Neiman Marcus remain fluid and could change depending on market conditions, according to people familiar with the matter. The company’s e-Commerce sites are still operational, and the retailer recently launched a new styling tool designed to help with remote purchasing.
The retailer also created new roles at the store and regional levels that “transcend a single product transaction” by emphasizing the experiential side of retailing, including dining, client services, hospitality and alterations. Associates also have had their capabilities enhanced with new digital clienteling tools that assist them on the sales floor.
However, Neiman Marcus still has much work ahead if the retailer hopes to once again become profitable, and even if it avoids bankruptcy there will still be cuts. The retailer expects to eliminate approximately 500 roles in the Last Call business over the course of 2020, along with 250 “non-selling associates” across all stores. Additionally, the company’s in-store and online teams have been united under one leader to streamline operations.