Neiman Marcus Group has announced that it has entered into a restructuring support agreement with a significant majority of its creditors to undergo a financial restructuring, reducing its debt load and interest payments and supporting continued operations during the COVID-19 pandemic and beyond.

To implement the RSA, the company has commenced voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division. As part of the process, Neiman Marcus Group has secured debtor-in-possession financing of $675 million from creditors to enable business continuity throughout proceedings.

These creditors have also committed to fulfill a $750 million exit financing package that would fully refinance the DIP financing and provide additional liquidity for the business.

"Prior to COVID-19, Neiman Marcus Group was making solid progress on our journey to long-term profitable and sustainable growth,” says Geoffroy van Raemdonck, chairman and chief executive officer, Neiman Marcus Group. “We have grown our unrivaled luxury customer base, expanded our industry-leading customer relationships, achieved higher omni-channel penetration and made meaningful strides in our transformation to become the preeminent luxury customer platform. However, like most businesses today, we are facing unprecedented disruption caused by the COVID-19 pandemic, which has placed inexorable pressure on our business." 

Kirkland & Ellis is serving as legal counsel to the company. Lazard is serving as the company's investment banker, and Berkeley Research Group is serving as the company's financial advisor. The company expects to emerge from the process in early fall 2020.

“My team and I appreciate the partnership and the steadfast support of all our stakeholders and Board of Directors through this process,” Raemdonck continues. “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. 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.”