• Retail Dive

Months out of bankruptcy, Neiman Marcus refinances $1.1B in debt

By Ben Unglesbee

Published March 31, 2021


Dive Brief:

  • Neiman Marcus refinanced $1.1 billion in debt after emerging from Chapter 11 last fall, buying the company time and adding funds for a turnaround.

  • The luxury retailer refinanced a portion of its exit facilities with new senior secured notes, due 2026 and which carry an interest rate of about 7.1%, according to a company press release.

  • The recently completed bond issue lowers Neiman's annual interest payments by $30 million and pushes out debt maturities. CFO Brandy Richardson said in a statement the bond sale also adds "financial flexibility as we invest in our supply chain, elevate our digital excellence and deliver unparalleled luxury experiences."

Dive Insight:


With the Federal Reserve supporting the corporate bond market since last spring, several retailers that can, have taken advantage with bond issues, whether to raise new liquidity and capital or to pay down existing debt.

Neiman's issue comes just months after it restructured its debt and corporate organization in bankruptcy. The retailer's Chapter 11 followed years of distress and bankruptcy speculation as debt leftover from private equity buyouts weighed on the luxury department store chain.


COVID-19 proved a tipping point, upending tourism to the glitzy cities and shopping areas that are home to Neiman's stores as well as disrupting the market for apparel and luxury goods.


The company was able to shed a lot, but not all, of its debt in bankruptcy. It has also since spun off its MyTheresa e-commerce unit, long a source of growth for the troubled retailer.


After exiting Chapter 11 last September, S&P Global Ratings gave the company a CCC+ rating with a negative outlook citing an unsustainable capital structure and uncertain recovery from an apparel market still struggling with the impact of COVID-19.


Since then analysts have predicted a comeback for fashion and apparel in 2021 with the vaccine roll out, but a high degree of uncertainty still hangs over the market.


According to Women's Wear Daily, which reported on Neiman's financing moves before they became public, the bond issue helped reduce risk for Neiman's largest lenders, who also own the company after its bankruptcy. The refinancing did not, however, deleverage the company.


It did, according to the company, simplify its capital structure and reduce interest expenses and extend maturities, which gives Neiman more time to find its footing in a drastically changed sector. "This refinancing validates the momentum we are seeing as we continue to execute on our strategic transformation plan amidst improved market conditions," Richardson said in the release.

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