Neiman Marcus Defaults on Loan, Bankruptcy Seen Near

The Neiman Marcus Group has defaulted on its $5.6 million payment on bonds that was due Wednesday, raising the specter of a bankruptcy filing soon, possibly within days.

“It’s in the best interests of the Neiman Marcus brand and its future and all parties involved if there is a Chapter 11 bankruptcy if possible,” said another source close to the situation. “You couldn’t really have a liquidation of the business in this marketplace,” said the source, referring to the impact of the coronavirus and all nonessential stores across the country being closed. However, Neiman’s and its sister division Bergdorf Goodman continue to operate their web sites.

On Thursday, Daniel Kamensky, managing partner of Marble Ridge Capital, one of the bondholders, sent a letter to NMG’s chairman of the board David Kaplan, and general counsel Tracy Preston. “Neiman Marcus is now in default on its payment of interest obligations, and can no longer hide behind its protestations to the contrary.

NMG has been paying around $300 million in annual interest expense, dragging down its profitability and resulting in losses. The luxury retailer generates $5 billion in annual volume through its 43 Neiman’s stores, two Bergdorf Goodman stores, neimanmarcus.com, bergdorfgoodman.com, the Mytheresa luxury web site, the Horchow direct-to-consumer business and Last Call outlets.

If I never get to see the Neiman’s at Hudson Yards..

Oh no.

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