Neiman Marcus Group Inc. has reportedly been preparing to file for bankruptcy protection by the coming week. It will become the first leading department store operator in the U.S. to experience a fallout in the economy due to the coronavirus outbreak. It apparently in the final stages of negotiations for a loan which will be amounting up to about hundreds of millions of dollars for helping to bankroll its operations during the process duration.
Apparently, the filing for bankruptcy protection can be possibly coming within a span of days and there could be a change in the timings. The retailer had held certain initial talks with the lenders about a possible loan for bankruptcy which would help keep the firm running as it works towards reaching a recovery plan.
According to reliable sources, the retailer had been struggling even before the spread of coronavirus across the U.S. which eventually forced it to close the stores. Marble Ridge, a creditor mentioned in a letter that the store operator did not pay a bond worth $5.7 million which further triggered a grace period of 30 days for Neiman before the event of default was to take place.
Sources familiar with the matter reported that the total borrowings made by Neiman Marcus was around $4.8 billion. Certain amount of this debt was originally a legacy of the leveraged buyout that cost $6 billion in the year 2013 by its owners, namely the Canada Pension Plan Investment Board (CPPIB) and Ares Management Corp.
The bankruptcy preparations have been reportedly confidential wherein both Marcus and Ares made no comments. Several other department stores that have had to close their stores down have been struggling to avoid the same results as Marcus. Nordstrom and Macy’s have been making a rush to be able to grab new financing like having borrowed against their real-estate holdings.