NEW YORK – Luxury retailer Neiman Marcus plans to raise up to $100 million by returning to the stock market with an initial public offering.
That amount is likely to change, though, as bankers gauge investor interest. The plan to go public, announced in a regulatory filing Monday, comes about eight years after private equity firms TPG Capital and Warburg Pincus bought Neiman Marcus for $5.1 billion.
Neiman Marcus has benefited from affluent shoppers who are willing to drop $1,000 for a pair of stilettos. During the recession, Neiman Marcus was not as hurt by the consumer spending pullback as other retailers, because the wealthy suffered less in the poor economy.
Still, the initial public offering comes at a time when the stock market, which influences luxury spending, has become volatile.
Neiman Marcus won’t receive any proceeds from the offering. The Dallas company operates 41 Neiman Marcus stores, two Bergdorf Goodman locations, and 35 discount shops under the Last Call brand. It also operates six Cusp stores, which cater to younger customers.
The Wall Street Journal article reported in late May that Neiman Marcus recently rebuffed a proposal that would involve buyout firm KKR & Co. investing in competitor Saks Inc., the operator of Saks Fifth Avenue, and then engineering a combination of Saks and Neiman.
According to the Journal, Neiman Marcus turned down the proposal for several reasons, including the terms and the complexity of the deal. At the time, Neiman’s private equity owners were looking to sell the company outright or take it public.
The Wall Street Journal reported Monday on its website that Canadian department store operator and Lord & Taylor parent Hudson’s Bay has now emerged as a potential suitor for Saks Inc. It cited an anonymous source familiar with the issue. Hudson Bay could not be immediately reached for comment. A Saks spokeswoman declined to comment.
Dan Hess, CEO of Merchant Forecast, an independent research firm that monitors the retail sector, believes that an initial public offering would do well and that there’s an investor appetite for luxury companies.