Neiman Marcus Chain Sold For $6 Billion
Get Breaking News First
NEW YORK (AP) - 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.
“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.
(© Copyright 2013 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)
- Police: Texas Tech Football Player Injured In Shooting
- State Fair Sets Food & Ride Sales Record
- “Fury” Blasts “Gone Girl” At Box Office
- TCU Is Now Highest Ranked Big 12 Team
- Stars Place Nichushkin On IR
- Greyhound Passengers Complain Sick Rider Allowed To Stay On Bus
- Carroll ISD Opting Out Of Federal Lunch Program
- TCU College Freshman Is Just 11 Years Old
- Guyer High School Football Player Remembered
- City Of Fort Worth Demolished Wrong Home For A Second Time