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Neiman Marcus Group Exits Chapter 11 with Strengthened Capital Structure

September 29, 2020, 06:00 AM
Filed Under: Bankruptcy

Neiman Marcus Holding Company, Inc. (formerly Neiman Marcus Group LTD LLC) announced it has emerged from voluntary Chapter 11 protection, successfully completing its restructuring process and implementing the Plan of Reorganization ("Plan") that was confirmed by the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division on September 4, 2020.

The company emerges with the full support of its creditors and new equity shareholders, now operating with a strengthened capital structure that eliminated more than $4 billion of existing debt and more than $200 million of cash interest expense annually, with no near-term maturities.

“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,” stated Geoffroy van Raemdonck, Chief Executive Officer of Neiman Marcus Group.                                                                                 
“Our new owners, which include PIMCO, Davidson Kempner Capital Management, and Sixth Street, understand the value of our brands and the opportunity for growth,” continued Mr. van Raemdonck. “They are also strongly committed to supporting our company on sustainability issues – where we intend to be a leader within the industry. At the conclusion of this process, I remain profoundly impressed by the strength of Neiman Marcus and Bergdorf Goodman, the commitment of our associates, the unwavering support of our brand partners, and the loyalty of our customers.”

The new owners are funding a $750 million exit financing package that fully refinances the debtor-in-possession (“DIP”) loan and provides significant additional liquidity for the business.

The Company has also secured a $125 million FILO facility led by Pathlight, the proceeds of which refinance existing debt and will provide liquidity to support the Company’s ongoing operations and strategic initiatives. The exit Term Loan financing and FILO facility are in
addition to the liquidity provided by the $900 million ABL led by Bank of America and a consortium of commercial banks. With the support of its new shareholders and funds available from the exit financing, FILO facility, and ABL facility, the Company expects to be able to execute on the strategic initiatives to ensure a long and successful future for Neiman Marcus.

Neiman Marcus Group also emerges with a newly constituted Board of Directors, including:

  • Geoffroy van Raemdonck, who serves as Chief Executive Officer of Neiman Marcus Group;
  • Meka Millstone-Shroff, who serves as a strategic operating advisor and board member to a variety of companies, including serving as an independent director on the boards of Party City and Nanit;
  • Pauline Brown, who most recently served as the Chairman of North America for LVMH Moët Hennessy Louis Vuitton and served on the boards of L Capital and several LVMH subsidiaries, including Donna Karan, Marc Jacobs, and Fresh Cosmetics;
  • Pamela Edwards, who most recently served as Chief Financial Officer of the Mast Global and Victoria’s Secret divisions of L Brands, the multi-brand specialty retailer;
  • Kris Miller, who most recently served as the Chief Strategy Officer for eBay, the global ecommerce marketplace, from 2014-2020; and
  • Scott D. Vogel, who is the Managing Member at Vogel Partners LLC.

Kirkland & Ellis LLP is serving as legal counsel to the Company, Lazard Ltd. is serving as the Company’s investment banker, and Berkeley Research Group is serving as the Company’s
financial advisor.

The Noteholders are represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal counsel and Houlihan Lokey as investment banker.

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