(Adds industry context)
By Lauren Hirsch and Siddharth Cavale
Jan 6 Neiman Marcus Group LLC said on Friday it
would withdraw its initial public offering, nearly two years
after the upscale department store chain filed its intent with
U.S. regulators to go public, as it grapples with weaker
Neiman Marcus' abandoned IPO underscores the challenges
facing the high-end retailer, as the broader industry struggles
under the weight of competitive pressure from off-price stores
and online retailers such as Amazon.com Inc
Neiman Marcus declined to comment on the reasons for pulling
Neiman Marcus, which also operates the Bergdorf Goodman and
MyTheresa brands, was acquired by private equity firm Ares
Management LP and Canada Pension Plan Investment Board
three years ago for $6 billion.
The Dallas-based company filed to go public in August 2015,
but it soon decided to put these plans on hold as a strong U.S.
dollar hurt its store revenue in gateway tourist destinations
such as New York, Las Vegas, Los Angeles and Hawaii.
Late 2015 through 2016 was a notably rocky period for IPOs,
plagued by market jitters and volatility. Companies only raised
$19 billion through public offerings last year, down 42 percent
from $32 billion a year prior.
As skittish investors became more concerned with companies'
earnings, some of the biggest victims of last year's IPO rut
were private equity backed, highly indebted companies such as
Neiman Marcus, which had been looking to use IPO proceeds to pay
As of late October, Neiman Marcus had about $4.9 billion in
debt, including its asset-based revolving credit facility, much
of which stemmed from its 2013 buyout. Last fall, lenders
allowed it to push out a maturity on its revolving credit line
to 2021, under certain conditions, from 2018, giving the company
more time to boost sales to repay debt.
Neiman Marcus's term loan was trading below face value at
about 86 cents on the dollar on Thursday, according to Thomson
Reuters data, indicating some investor concern about the
prospects of the company. Neiman Marcus' bonds, meanwhile, are
trading at 87 cents on the dollar, down about 8 percent from
this time last year.
For the 12 months ending Sept. 26, Neiman Marcus reported
$4.95 billion in sales, a decrease of 2.9 percent from the year
prior. It also reported a net loss of $406 million, as compared
to net earnings of $14.9 million a year earlier.
(Reporting by Lauren Hirsch in New York; Additional reporting
by Jessica DiNapoli in New York; Editing by Bill Trott)