Neiman Marcus is weighing a possible sale of its swanky Bergdorf Goodman stores in New York City — and may even sell the whole company — as the Dallas-based luxury chain’s owners grow increasingly alarmed over weakening finances, The Post has learned.
Top executives at Neiman — whose CEO Geoffroy van Raemdonck has been blasted for taking fat pay packages as the retailer has slashed costs in a bumpy luxury market — are slated to meet with prospective buyers for Bergdorf in New York City this week, according to a source close to the situation.
But Neiman is also examining a possible auction of the entire company as a rift has emerged between the three buyout shops that scooped the retailer out of bankruptcy during the depths of the pandemic in September 2020, according to sources close to the situation.
Neiman’s majority owner Pacific Investment Management Co., better known as Pimco, is optimistic about a turnaround and wants to maintain control.
But minority investors Davidson Kempner Capital Management and Sixth Street Partners are looking to exit, blaming van Raemdonck for the company’s declining sales and profits, sources say.
“There is a civil-war going on between the ownership group,” a source with knowledge of the situation told The Post. “Neiman Marcus had a very bad year, and the minority shareholders have lost faith with the business plan and with management.”
The buyout firms have preliminarily agreed to explore a sale of Bergdorf to facilitate a possible cashout by Davidson Kempner and Sixth Street, sources said.
Nevertheless, the owners are also concerned that selling Bergdorf, Neiman’s most prized property acquired in 1972, would painfully diminish the overall value of Neiman.
“The crown jewel will always find a buyer, but I think Neiman loses most of its value if Bergdorf goes away,” one well-placed insider told the Post. “Saks and Neiman are considered equals. The differentiator for Neiman has always been Bergdorf.”
London-based luxury purveyors Harrods and Selfridges are both seen as prospective bidders for Bergdorf, as is Paris based Galeries Lafayette, according to sources close to the situation.
Bergdorf also might attract bids from US private-equity firms and deep-pocketed investors in the Persian Gulf and Asia, the sources said.
JPMorgan has been tapped to run the sale process, according to a source who spoke on the condition of anonymity.
“Part of why they are having this process is to figure out what the company is worth,” said one insider, reckoning that Neiman could be worth as much as $2 billion when including Bergdorf.
Representatives for Pimco, Sixth Street and Davidson Kempner weren’t immediately able to comment. “We do not comment on rumors or speculation,” Neiman Marcus said in a statement.
Representatives for Harrods, Selfridges and Galeries Lafayette also couldn’t immediately be reached for comment.
The luxury market has lately taken a hit — slamming companies including French conglomerate LVMH, whose boss Bernard Arnault subsequently lost his position as the world’s richest person to Elon Musk.
Earlier this month, Neiman’s financials got leaked, showing that profitability has taken a hit versus last year when stores were riding a post-pandemic luxury boom.
Neiman’s Ebitda — or earnings before taxes, interest, taxes, depreciation and amortization — was $124 million for the quarter ended April 29 — down 25% from a year earlier, according to Bloomberg, which cited unnamed sources briefed on the company’s financials.
Revenue dropped 9% to $1 billion, Bloomberg reported.
“Leaking the financial results means something is up,” according to one source close to the company. “There is some disgruntlement. There are signs that point to dissension.”
The leak caught Neiman brass flat-footed, insiders said, forcing the CEO to explain publicly that Neiman was forced to discount its pricey duds as customers pulled back on their spending.
“We feel very strongly our strategy is working,” van Raemdonck told Women’s Wear Daily, adding that the company’s best customers are “compensating for the deceleration with the more promotional and less engaged” shoppers who “are more impacted by the macro environment.”
Earlier this year, van Raemdonck offended staff and customers alike when he told Fortune magazine that Neiman Marcus would spend less time courting less well-heeled shoppers, instead focusing on the 2% sliver of the company’s wealthiest customers who account for 40% of its business.
In February, slowing sales forced Neiman to lay off 5% of its workforce or about 500 employees, including completely axing store greeters who handled a variety of customer service functions like returns, The Post exclusively reported.
It’s not the first time Neiman has explored a possible Bergdorf spinoff.
In 2021, facing a cash crunch after emerging from bankruptcy, the retailer held discussions with Ashkenazy Acquisition Corp., the landlord of Bergdorf’s former luxury rival Barneys, as The Post reported.
This story originally appeared on NYPost
