The end of an era came when Neiman Marcus announced that it has filed for Chapter 11 bankruptcy, putting to an end a dynasty that maintained a firm foothold on designerwear for more than a century.
Why has Neiman Marcus filed for bankruptcy?
According to the Financial Times, Neiman Marcus is the latest private equity-backed company to fold to the pressures of an ailing economy.
The coronavirus-influenced restrictions have had an adverse effect on millions of businesses across the world and Neiman Marcus, carrying an estimated debt bill of $5.5 billion (R100,9 billion), could not see the light at the end of the tunnel.
Geoffroy van Raemdonck, the company’s chief executive held a positive outlook on the bankruptcy. He indicated in a statement that arriving at the decision was not easy but it sure was necessary to sustain the legacy of the brand.
He admitted that the sudden halt of the economy negatively impacted the solid progress made by the company in recent years to adapt to the growing demand for e-commerce.
However, according to Van Raemdonck, there is a ray of sunshine on the brim of this dark cloud. He asserted that the bankruptcy would help eliminate $4 billion from the hefty debt bill and with the acquisition of new majority shareholders, a new dawn awaits Neiman Marcus.
More than 13 000 employees at risk of losing their jobs
The United States (US), much like the rest of the world, has the daunting task of rehabilitating the state of its economy. Millions of jobs have been impacted by the rapid spread of the deadly virus and the short-term future does not hold a great deal of promise.
More than 13 000 Neiman Marcus employees in the chain’s 67 locations are nowhere close to knowing what their future holds. Most of them were already on furlough and now, with the news of the bankruptcy, it almost seems certain that sacrifices will be made.
More updates from the upscale brand are expected.
