Just a few months after opening its Dallas hub at CityPlace Tower, Neiman Marcus may be making a move to merge with Saks Fifth Avenue, the New York Post reports.
The Dallas-based retailer also owns Bergdorf Goodman in New York, and has a hub in New York City at 5 Bryant Park. Another hub opened in Bangalore, India, last year. The Dallas City Council last year approved a $5 million incentive package to keep the Dallas hub in the city.
Citing sources and insiders, the Post says that the luxury chain started by Herbert Marcus, Sr., his sister, Carrie Marcus Neiman, and her husband A.L. Neiman in 1907 could sell for about $2 billion, less than half the $5.1 billion it commanded in 2005 when it began what would be a series of buyouts necessitated by debt.
The company emerged from bankruptcy three years ago and is under private ownership, with Pacific Investment Management Co. (or PIMCO) as its majority investor, and Davidson Kempner Capital Management and Sixth Street Partners as minority owners. The latter two have reportedly been advocating for an immediate sale of the company, while PIMCO was willing to hold out a little longer, the Post reports.
After a July board meeting, apparently all three agreed to considering a bid from Sax Fifth Avenue parent company Hudson’s Bay. Saks did not comment, and Neiman Marcus told the Post that the company does not “comment on rumors or speculation.”
In June, the company said its third-quarter earnings declined as it was forced to offer more deals and discounts to contend with a weaker demand for luxury items, Bloomberg reported. Earnings before interest, taxes, depreciation, and amortization were down 25 percent for that quarter over the same period last year, and revenue dropped about 9 percent year-over-year to $1 billion.
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