#mergers and acquisitions#Neiman Marcus#private investors

Private Investors To Buy Neiman Marcus

|Sep 9|magazine7 min read

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The Dalles, TX based luxury retail chain, Neiman Marcus Inc, has agreed to sell itself to Ares Management LLC and the Canada Pension Plan Investment board for $6 billion.

The pension fund and Ares will hold equal economic interest in the luxury chain, and the management will hold on to minority stakes, the buyers said in a statement. The deal with likely end any prospects for an initial public offering for Neiman.

In 2005, Neiman’s private owners TPG Captial and Warburg Pincus LLC paid roughly $5.1 billion for the retail chain. The state of revenue hasn’t returned for Neiman since the financial crisis of 2008, as luxury shoppers have been slow to return to stores.

“Neiman is an excellent brand and an excellent company,” Michael Appel, founder of Appel Associates LLC, a retail consultancy, said to dallasnews.com in a phone interview yesterday. “The question is what can the buyers do with it? Hope springs eternal. Perhaps they feel that their management and their ability to work with companies will get them the return they are looking for.”

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Revenue for Neiman rose 8.6 percent in 2012 to $4.35 billion. The retailer runs 21 stores across the U.S. and two Bergdorf Goodman department stores on Fifth Avenue in New York City.

The deal is the second in the luxury retail industry as Hudson’s Bay Co agreed to buy Saks Inc for $2.4 billion in July, marrying Canada’s leading department store chain with of the United States most prestigious luxury retailers. The merger brings together Lord & Taylor and Saks Fifth Avenue brands and creates a company operating 320 stores. 

Photo credit: Doug James / Shutterstock.com