- Neiman Marcus CEO Geoffroy van Raemdonck said there’s “no need” to sell the business as rumors swirl that rival Saks Fifth Avenue is eager to take it over.
- “Our shareholders don’t have the need to sell the business because we have a billion of available liquidity, we’re profitable and we’re reporting results that are in a good place and can only be better,” van Raemdonck told CNBC.
- Over the recent holiday, comparable sales trends at Neiman were down low single digits compared to last year, while store comparable sales trends were flat compared to the prior period.
ORLANDO, Fla. — As rumors swirl over whether Saks Fifth Avenue will acquire Neiman Marcus, Neiman’s CEO told CNBC there’s “no need” to sell the business, adding it’s unlikely to change hands in the next five years.
Neiman’s largest competitor and biggest rival has reportedly made a series of bids to acquire it over the years, and most recently made a $3 billion offer that was rejected, The Wall Street Journal reported in December. The takeover attempt comes as department stores struggle to stay relevant while many shoppers opt to shop from their favorite brands directly. It also comes as the luxury industry resets after a surge in demand during the Covid-19 pandemic that has begun to taper off for some.
Some people close to the companies have told CNBC a merger between the two is inevitable, and is a matter of when, not if. But Neiman’s CEO Geoffroy van Raemdonck said there is currently “no process to sell the company.”
“In the history of times, there’s been multiple conversations over maybe two decades, from each side looking at it, and it hasn’t happened,” van Raemdonck told CNBC on Tuesday during the ICR Conference in Orlando. “What I can say is that our shareholders don’t have the need to sell the business because we have a billion of available liquidity, we’re profitable and we’re reporting results that are in a good place and can only be better as we execute on our strategy and the economy rebounds and so there’s not an urgency on our side.”
Since Neiman filed for bankruptcy in 2020, Pacific Investment Management, Davidson Kempner Capital Management and Sixth Street Partners have owned the luxury retailer. Eventually, those owners will seek to offload the business, but van Raemdonck said it won’t be any time soon.
“In the future, they will sell, and that future is probably the next five years. Sell or go public or do something,” said van Raemdonck. “There’s always going to be a lot of heat when you are owned, when you’re private and owned by unnatural holders but there’s no process to sell the company right now and if someone has an interest, we’ll definitely listen to them.”
The decision will largely come down to Neiman’s owners. They have not yet received an offer that was large or attractive enough to move the needle, a source familiar with the matter previously told CNBC.
Over the recent holiday, comparable sales trends at Neiman were down low single digits compared to last year, while store comparable sales trends were flat compared to the prior period, the company said in a news release Tuesday.
In the quarter leading into the holiday season, Neiman saw demand slow across “all facets” of its business that spanned all geographies, all channels and all types of customers, said van Raemdonck. He called the luxury retail environment “volatile.”
If Neiman were to merge with Saks, the companies would be able to strip down costs, negotiate better terms with vendors and perhaps, put up a better shield against shifting industry trends that have dampened the relevance that department stores once commanded.
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Source: Business - cnbc.com
