Neiman Marcus Bankruptcy and Extra Savings Now

April 20, 2020 by Lila Delilah

The luxury fashion retail sector is getting hit with another big blow. The Dallas-based retailer, Neiman Marcus is expected to file for Chapter 11 bankruptcy protection later this week. The iconic store missed a $5.7 million interest payment, which is triggering an immediate need for a lifeline.

Neiman Marcus is said to be holding $4.3 million in debt and operates 43 retail stores, along with Last Call and two Bergdorf Goodman locations in Manhattan. All stores have been temporarily closed since March because of COVID-19 but the retailer’s problems started well before the worldwide pandemic. Store closings only hastened bankruptcy, which was rumored for about a year.

Filing for Chapter 11 bankruptcy protection allows Neiman Marcus to default on some debt, remain open, close underperforming stores, restructure its operation, and secure additional capital that’s structured in a way that’s less challenging to pay back.

Gary Wassner, CEO of Hilldun Corp, a financial services company specializing in fashion and retail said that the Neiman Marcus bankruptcy should not be compared to Barneys as it’s unlikely that Neiman Marcus will close its doors for good.

“Barneys was worth less than $1 billion and Neiman Marcus is a $5 billion company that has real value. It is a very valuable asset. They own a lot of their real estate and have a very strong CEO,” Wassner said.

Wassner believes that part of retail’s struggles has to do with the current promotional mindset. He believes deliveries come in too early and by the time customers are interested in shopping the merchandise is already on sale. “We are a buy now, wear now country. It’s how people think,” Wassner says.

Shoppers can expect a windfall of sales once stores open.”Shoppers haven’t even seen the Spring and Summer merchandise and it’s going to have to get moving fast,” Wassner says. “Nobody wants to ship into a discounted market.” Retailers will have to speed up the Summer season and push Fall back.

Those looking for Neiman Marcus savings now can hit the sale section where reduced merchandise is an additional 25% off, which brings the total saving to 70% to 80% off on many items. There is also a beauty promotion where you can save 25% off most cosmetics and fragrances.  Bergdorf Goodman will begin offering an extra 30% off sale merchandise on Tuesday.

Be mindful of how you shop now. If our expectations are correct, you might want to save your cash for when stores open again.


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