Like a myriad of competing brick-and-mortar retailers hit hard by the competition of the e-commerce market, Neiman Marcus has reported dwindling sales and earnings quarter after quarter. But now, the Dallas, Texas-based luxury department store chain is looking to put an end to its revenue downturn and for good: In its results for the second quarter of fiscal 2017, ending on Jan. 28, 2017, Neiman Marcus announced on Tuesday that the company is "undertaking a process to explore and evaluate potential strategic alternatives," which may include putting itself (or other assets) up for sale.
Neiman Marcus — which posted a 6.1 percent decrease in comparable revenue to $1.40 billion this quarter — may already have a buyer in Hudson's Bay Company. According to a CNBC report, citing Dow Jones, the Canadian business group is in talks to purchase the struggling retailer. While a representative for Neiman Marcus was not immediately available to comment, a company spokesperson for Hudson's Bay provided the following statement:
As a matter of company policy, we do not comment on rumors or market speculation. Generally speaking, as we have previously stated, we selectively evaluate opportunities to accelerate the company's strategic growth while maintaining or enhancing its credit profile.
This deal is said to exclude Neiman Marcus's debt load of $4.9 billion, which began compounding following its $6 billion acquisition by the Canada Pension Plan Investment Board and Ares Management in 2013.
The transaction wouldn't be all that surprising: Just as Neiman Marcus has looked to sell the company in the past (and as recently as this past June), Hudson's Bay is in the business of buying. Its most high-profile stateside purchase to date, perhaps, has been of Saks, Inc., which was completed in November 2013. This added Saks Fifth Avenue to its portfolio of retailers that also includes Lord & Taylor and, as of January 2016, Gilt. There were also rumors just last month that Hudson's Bay had begun approaching Macy's.
According to WWD, neither Hudson's Bay nor Neiman Marcus has set a timetable for the sale of the company or any of its assets.