As speculation mounts over whether Saks Fifth Avenue may buy Neiman Marcus, Neiman’s CEO told that there is “no need” to sell the company, adding that it is unlikely to change hands in the next five years.
- IMPORTANT NOTES
- Neiman Marcus CEO Geoffroy van Raemdonck stated that there is “no need” for the company to be sold, despite speculations that rival Saks Fifth Avenue is interested in acquiring it.
- “Our shareholders don’t have the need to sell the business because we have a billion of available liquidity, we’re profitable and we’re reporting results that are in a good place and can only be better,” van Raemdonck told in an interview.
- Comparable sales trends at Neiman Marcus were down in the low single digits compared to previous year, while store comparable sales trends were flat compared to the prior year.
The Wall Street Journal reported in December that Neiman’s main competitor and biggest rival had made a series of proposals to acquire it over the years, most recently a $3 billion deal that was rebuffed. The takeover effort comes as department shops struggle to remain relevant, while many shoppers prefer to shop directly from their favorite brands. It also comes as the luxury industry recovers from a rise in demand caused by the Covid-19 outbreak, which has begun to fade for some.
According to sources close to the companies, a merger between the two is unavoidable and a matter of when, not if. However, Geoffroy van Raemdonck, CEO of Neiman Marcus, stated that there is presently “no process to sell the company.””In the history of times, there’s been multiple conversations over maybe two decades, from each side looking at it, and it hasn’t happened,” van Raemdonck told reporters on Tuesday at the ICR Conference in Orlando. “What I can say is that our shareholders don’t have the need to sell the business because we have a billion dollars of available liquidity, we’re profitable, and we’re reporting results that are in a good place and can only be better as we execute on our strategy and the economy rebounds, so there’s not an urgency on our side.”
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Pacific Investment Management, Davidson Kempner Capital Management, and Sixth Street Partners have owned Neiman Marcus since it declared bankruptcy in 2020. Those owners will eventually try to sell the company, but van Raemdonck says it won’t be anytime soon.
“They will sell in the future, which is most likely in the next five years.” “Sell, go public, or do something,” van Raemdonck added. “There’s always going to be a lot of heat when you are owned, when you’re private, and when you’re owned by unnatural holders, but there’s no process to sell the company right now, and if someone has an interest, we’ll definitely listen to them.”
The decision will largely be made by the owners of Neiman Marcus. According to a source familiar with the situation, they have yet to receive an offer that is significant or appealing enough to move the needle. The business said in a news statement Tuesday that comparable sales trends at Neiman Marcus were down low single digits compared to the previous year, while store comparable sales trends were flat compared to the prior year.
According to van Raemdonck, in the quarter leading up to the holiday season, Neiman saw demand slow across “all facets” of the business, which included all geographies, all channels, and all sorts of clients. He referred to the premium retail climate as “volatile.”If Neiman Marcus and Saks merge, the companies would be able to cut expenses, negotiate better terms with vendors, and maybe build a stronger defense against evolving market trends that have diminished the relevance that department stores formerly commanded.
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