DALLAS (1080 KRLD) - Neiman Marcus stores officially filed for Chapter 11 bankruptcy protection today in a Houston court.
The Dallas-based luxury retailer has fallen on hard times, and it's only gotten worse during the Coronavirus outbreak which has forced Neiman-Marcus to temporarily close all its stores and to furlough most of its employees.
“Like most businesses today, we are facing unprecedented disruption caused by the COVID-19 pandemic, which has placed inexorable pressure on our business,” said CEO Geoffroy van Raemdonck in a statement on the company's website.
In their statement Thursday, Neiman Marcus said $675 million in financing has been secured from creditors to fund operations through bankruptcy this fall. Neiman's creditors also committed to a financing package of $750 million to refinance that financing and provide additional liquidity once they exit bankruptcy, which they plan to do this fall.
Once the company emerges from bankruptcy, the creditors will become the majority owners in the longtime luxury brand.
"The binding agreement from our creditors gives us additional liquidity to operate the business during the pandemic and the financial flexibility to accelerate our transformation. We will emerge a far stronger company," van Raemdonck said. "In a world that is changing, we are uniquely positioned to give our brand partners access to our loyal luxury customers like no other company. We will deliver that through the strength of our associate relationships and digital solutions."
Reuters reported in mid April that the company was close to securing a loan worth hundreds of millions of dollars to keep some of its operations afloat during bankruptcy proceedings.