US department store chain, Neiman Marcus, has been sold to private equity for the sum of US$6 billion.
The buyer of the 41 Neiman Marcus, 36 Last Call, and two New York Bergdorf Goodman stores is a partnership between private equity houses the Canadian Pension Plan Investment Board (CPPIB) and Ares Management LLC.
A portion of the purchase price will be used to repay debt, with the company’s management to retain a minority stake. The transaction is expected to close before the end of the year, subject to regulatory approvals.
“We are delighted to join with CPPIB as a long-term investor in Neiman Marcus Group, a leading luxury retailer with global brand recognition that attracts shoppers from all over the world. We share a common vision with the company’s management team, led by its highly respected CEO, Karen Katz, and together, we plan on investing meaningful capital into the business to ensure Neiman’s long-term position as the unparalleled leader in luxury retail,” said David Kaplan, senior partner and co-head of Ares.
“This investment fits with our longstanding approach of accelerating growth in companies in the consumer and retail sectors. As a result of this philosophy, we believe we have achieved superior growth with many consumer facing businesses including Floor & Decor, General Nutrition Centers, House of Blues, Maidenform Brands, Samsonite, Serta, Simmons, Smart & Final, and 99¢ Only Stores.”
The department store business has sales of around US$4.5 billion and has been owned by private equity firms TPG and Warburg Pincus since 2005. Initially it had been seeking an initial public offering, having lodges paperwork with the Securities and Exchange Commission in June.
