Neiman Marcus, an icon in luxury retailing, said yesterday it has agreed to sell its chain of department stores to two private investment...
NEW YORK — Neiman Marcus, an icon in luxury retailing, said yesterday it has agreed to sell its chain of department stores to two private investment firms for about $5.1 billion in cash.
Texas Pacific Group and Warburg Pincus have agreed to pay $100 per share for Neiman Marcus, which operates 35 Neiman Marcus stores, a Bergdorf Goodman women’s store and a Bergdorf Goodman men’s store. The price is a slight premium to Neiman Marcus’ closing price of $98.32 on Friday but is more than 25 percent higher since mid-March when the company announced it was considering putting itself up for sale.
Shares fell $5.36 to $92.96 yesterday.
Neiman Marcus Chairman Richard Smith and his family, who own a “significant” portion of Neiman Marcus’ stock, separately agreed to vote their shares in favor of the transaction, the company said.
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The acquisition is the latest in a flurry of retail deals in the past few months, fueled by private equity firms that are flush with cash as well as heavy cash flows from the likes of merchants like Federated Stores. They feel the way to grow in an overall stagnant apparel market is to gobble up other chains.
Unlike many of the other targets, Neiman Marcus is not in a turnaround situation. Rather, it’s been a star performer in the retailing sector, benefiting from robust sales of the white-hot luxury market, whose well-heeled customers have not been vulnerable to the economy’s ups and downs.
In its fiscal 2004 year, Neiman Marcus posted a same-store sales gain of 14 percent. Same-store sales are considered the best indicator for a retailer’s health.
In addition to its stores, Neiman Marcus is well-known for its annual Christmas catalog, which included among its offerings last year a $10 million zeppelin.
Texas Pacific, which manages more than $15 billion in assets, has investments in a number of companies including the retailers Petco, J. Crew and Debenhams and the fast-food restaurant company Burger King. Warburg Pincus has about $13 billion under management and invests in the financial services, health care, media and energy industries as well as real estate.