Neiman Marcus CEO says there's ‘no need’ to sell the business as Saks takeover rumors swirl

Shoppers enter and exit the Neiman Marcus at the King of Prussia Mall in King of Prussia, Pennsylvania, on Dec. 8, 2018.

Mark Makela | Reuters

ORLANDO, Fla. — As rumors swirl over whether or not Saks Fifth Avenue will purchase Neiman Marcus, Neiman’s CEO informed CNBC there’s “no want” to sell the business, including it is unlikely to change palms in the subsequent 5 years. 

Neiman’s largest competitor and largest rival has reportedly made a collection of bids to purchase it over the years, and most not too long ago made a $3 billion provide that was rejected, The Wall Street Journal reported in December. The takeover try comes as department shops wrestle to keep related whereas many consumers choose to store from their favourite manufacturers straight. It additionally comes as the luxurious business resets after a surge in demand throughout the Covid-19 pandemic that has begun to taper off for some.

Some folks shut to the corporations have informed CNBC a merger between the two is inevitable, and is a matter of when, not if. But Neiman’s CEO Geoffroy van Raemdonck stated there may be presently “no course of to sell the firm.” 

“In the historical past of instances, there’s been a number of conversations over possibly 20 years, from both sides it, and it hasn’t occurred,” van Raemdonck informed CNBC on Tuesday throughout the ICR Conference in Orlando. “What I can say is that our shareholders do not have the want to sell the business as a result of we’ve got a billion of obtainable liquidity, we’re worthwhile and we’re reporting outcomes which are in a great place and might solely be higher as we execute on our technique and the financial system rebounds and so there’s not an urgency on our facet.” 

Since Neiman filed for chapter in 2020, Pacific Investment Management, Davidson Kempner Capital Management and Sixth Street Partners have owned the luxurious retailer. Eventually, these house owners will search to offload the business, however van Raemdonck stated it will not be any time quickly. 

“In the future, they may sell, and that future might be the subsequent 5 years. Sell or go public or do one thing,” stated van Raemdonck. “There’s all the time going to be a number of warmth if you find yourself owned, while you’re personal and owned by unnatural holders however there is not any course of to sell the firm proper now and if somebody has an curiosity, we’ll undoubtedly pay attention to them.” 

The determination will largely come down to Neiman’s house owners. They haven’t but acquired a suggestion that was giant or engaging sufficient to transfer the needle, a supply acquainted with the matter beforehand informed CNBC.

Over the current vacation, comparable gross sales traits at Neiman have been down low single digits in contrast to final yr, whereas retailer comparable gross sales traits have been flat in contrast to the prior interval, the firm stated in a information launch Tuesday.

In the quarter main into the vacation season, Neiman noticed demand sluggish throughout “all sides” of its business that spanned all geographies, all channels and all varieties of prospects, stated van Raemdonck. He referred to as the luxurious retail surroundings “unstable.”

If Neiman have been to merge with Saks, the corporations would give you the chance to strip down prices, negotiate higher phrases with distributors and maybe, put up a greater defend in opposition to shifting business traits which have dampened the relevance that department shops as soon as commanded.

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