Neiman Marcus Swings into Q1 Loss on Buyout Costs

Neiman Marcus logoDallas—Neiman Marcus Group today reported it swung into a first quarter loss due to more than $100 million in costs associated with the company’s sale in September.

For the quarter ended Nov. 2, the luxury retailer posted a loss of $13.1 million compared with a profit of $49.6 million a year earlier.

Sales Increase

The quarter included other expenses of more than $113 million relating the $6 billion acquisition of Neiman Marcus by Canada Pension Plan Investment Board and Ares Management LLC. Excluding those expenses, operating earnings were $141.5 million.

To finance the sale, Neiman Marcus’ long-term debt grew to $4.7 billion from $2.7 billion. TPG Capital and Warburg Pincus were paid $3.39 billion for their equity in the company. The two investment firms acquired Neiman Marcus in 2005 in a $5.1 billion leveraged buyout.

Net sales rose 5.7% to $1.13 billion from $1.07 billion a year ago while comparable store sales were up 5.7%.

In the company’s specialty retail division, which includes Neiman Marcus, LastCall and Bergdorf Goodman stores, sales increased 4.5% to $889.3 million. Online revenue increased 10% to $239.8 million.

 

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Jeff Prine

Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology. jeffp@busjour.com