Breaking News Bar
posted: 9/9/2013 2:01 PM

Owners of Neiman Marcus sell chain for $6 billion

hello
Success - Article sent! close
  • Ares Management and Canadian Pension Plan Investment Board announced Monday they are buying the luxury chain Neiman Marcus for $6 billion.

      Ares Management and Canadian Pension Plan Investment Board announced Monday they are buying the luxury chain Neiman Marcus for $6 billion.
    DAILY HERALD

 
Associated Press

NEW YORK -- Luxury merchant Neiman Marcus is getting a new owner.

Ares Management and Canadian Pension Plan Investment Board announced Monday they are buying the luxury chain Neiman Marcus for $6 billion. The two new owners will hold an equal economic interest in Neiman Marcus, and the company's management will retain a minority stake.

Order Reprint Print Article
 
Interested in reusing this article?
Custom reprints are a powerful and strategic way to share your article with customers, employees and prospects.
The YGS Group provides digital and printed reprint services for Daily Herald. Complete the form to the right and a reprint consultant will contact you to discuss how you can reuse this article.
Need more information about reprints? Visit our Reprints Section for more details.

Contact information ( * required )

Success - request sent close

"We plan on investing meaningful capital into the business to ensure Neiman's long-term position as the unparalleled leader in luxury retailer," said David Kaplan, senior partner and co-head of the private equity group of Ares.

The agreement follows an acquisition of another big luxury player: Saks Inc. Saks Inc., which operates Saks Fifth Avenue, recently agreed to sell itself to Hudson's Bay Co., the Canadian parent of upscale retailer Lord & Taylor, for about $2.4 billion.

The two deals come as the luxury market is showing signs of a slowdown after having rebounded after the Great Recession. Bain & Co. predicts luxury sales will be up 5 percent to 7 percent in the Americas this year, down from 13 percent in 20012.

In a statement, Karen Katz, president and CEO of Neiman Marcus, said that she has great confidence that Neiman Marcus's customers, employees and suppliers will share in her enthusiasm that its new investors will help pursue a focus dedicated to luxury fashion, innovative marketing and customer service.

Neiman Marcus, founded in 1907 by Herbert Marcus Sr., his sister Carrie Marcus, and her husband A.L Neiman, has had a series of owners during its rich history.

The company was sold to department store operator Broadway-Hale in 1969 and began planning national expansion outside of Texas. Through a series of deals, the retailer came under the ownership of the conglomerate Harcourt General, which also published textbooks and owned movie theaters.

In 1999, Harcourt General spun off Neiman Marcus stores and Bergdorf Goodman as its separate, publicly traded entity, the Neiman Marcus Group. In 2005, TPG Capital and Warburg Pincus bought the company for $5.1 billion in 2005, taking it private.

Neiman Marcus, which operates 79 stores, has a long-held reputation for coddling its wealthy shoppers with customer service that goes above and beyond the standard. In 1984, it established InCircle, the industry's first customer loyalty program, which now has 144,000 members and generated 40 percent of the company's total revenue in the latest fiscal year. Neiman Marcus also expanded its business online in 2000, becoming the first major luxury store to do so.

Now, like other upscale retailers, Neiman Marcus is trying to reinvent its shopping experience for its customers who are increasingly using their tablets and smartphones to research and buy their designer goods.

In June, the equity firms that currently own Neiman Marcus filed a plan for the Dallas-based company to go public while at the same time it searched for a buyer. The new deal, which is expected to be finalized in the fourth quarter, likely ends the retailer's opportunity to go public

Share this page
Comments ()
Guidelines: Keep it civil and on topic; no profanity, vulgarity, slurs or personal attacks. People who harass others or joke about tragedies will be blocked. If a comment violates these standards or our terms of service, click the X in the upper right corner of the comment box. To find our more, read our FAQ.
    help here