Shoppers enter and exit Neiman Marcus at King of Prussia Mall on December 8, 2018 in King of Prussia, Pennsylvania.
Mark Makela | Reuters
ORLANDO, Fla.—Amid rumors surrounding whether Saks Fifth Avenue will buy Neiman Marcus, Neiman’s CEO tells CNBC there is “no need” to sell the business and plans to change management over the next five years. is unlikely to change, he added.
Neiman’s biggest competitor and rival has reportedly made a series of takeover bids over the years, most recently making a $3 billion offer that was rejected, Wall said.・Street Journal reported in December. The acquisition effort comes as department stores struggle to stay relevant as more shoppers choose to shop directly from their favorite brands. It also comes as the luxury goods industry undergoes a reset after demand soared during the coronavirus pandemic and in some cases began to taper off.
Some people close to the companies told CNBC that a merger between the two companies is inevitable and that it’s a matter of when, not if. However, Neiman CEO Geoffroy van Raemdonck said there was “no process to sell the company” at this time.
“In the history of our time, for probably more than 20 years, there have been many discussions from both sides, but it hasn’t happened,” Van Raemdonck said Tuesday during an ICR meeting in Orlando. told CNBC. “What I can say is that our shareholders have no need to sell the business because we have $1 billion of available liquidity and we are profitable and reporting a well-positioned performance. There is no. We will implement our strategy and the economy will recover, so there is no urgency for us.”
Pacific Investment Management, Davidson Kempner Capital Management and Sixth Street Partners have owned the luxury retailer since Neiman filed for bankruptcy in 2020. Eventually those owners will let go of the business, but that won’t happen quickly, Van Raemdonk said.
“In the future it will be sold. That future will probably be within the next five years, whether it’s a sale or a public listing or something else,” Van Raemdonck said. “There’s always a lot of heat when you’re owned, owned by an undisclosed and unnatural owner, but there’s no process at this point to sell the company and if someone is interested… If so, we will definitely listen to them.”
The decision will largely be left to Neiman’s owners. They have not yet received any major moves or attractive offers, a person familiar with the matter previously told CNBC.
The company said in a news release Tuesday that Neiman’s comparable sales trend during the recent holidays was down low single digits year-over-year, while the store’s comparable sales trend was flat sequentially. .
Van Raemdonk said that in the quarter leading up to the holiday season, Neiman felt weak demand across “all aspects” of its business, across all regions, all channels and all types of customers. He called the luxury retail environment “volatile.”
If Neiman were to merge with Saks, both companies would be able to cut costs, negotiate better terms with vendors, and perhaps be more resilient to changing industry trends that weaken the relevance that department stores once boasted. You will be able to build a good shield.
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