October 25, 2021

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Neiman Marcus weighs possible sale of Bergdorf Goodman

Bergdorf Goodman is exploring a probable sale — and one particular achievable final result is that it moves to a surprising handle nearby, The Article has discovered.

Neiman Marcus, which has owned the storied Fifth Avenue luxurious mecca due to the fact 1972, has been interviewing bankers, which includes for a achievable sale, in a bid to elevate money soon after emerging from personal bankruptcy in September, resources informed The Article.

In a surprise twist, insiders say that among the the intrigued purchasers in the 122-year-aged office store is Ashkenazy Acquisition Corp. — the former landlord of Bergdorf’s now-deceased luxurious rival Barneys. That is mainly because Ashkenazy is on the prowl for tenants at its 660 Madison Ave., which Barneys vacated when it liquidated its retailers in December 2019.

Talks between Neiman and Ashkenazy have “recently heated up,” according to a supply with information of the predicament.

A black Barneys banner hanging in front of the stor.
Barneys shut its Madison Avenue flagship forever in December 2019.
AP

Neiman denied a sale but declined to comment on no matter whether the firm has recently held conversations with bankers or future bidders.

“We have no intention nor are we searching to market Bergdorf Goodman at this time,” a Neiman spokesperson reported. “We are strategically investing in our business and our makes with the intention of developing and strengthening the firm.”

A supply shut to the firm additional that Neiman is not in “active discussions pertaining to a sale.”

Of course, Ashkenazy could get outbid in any auction, which authorities forecast could fetch upwards of $1.five billion. Insiders say Bergdorf would probably attract interest from other big names in luxurious — foremost among the them Bernard Arnault, the billionaire whose French luxurious big LVMH scooped up Tiffany & Co. earlier this year for $fifteen.eight billion.

Photo of Bernard Arnault, head of luxury conglomerate LVMH.
Watchers say Bernard Arnault, the billionaire driving French luxurious big LVMH, might be intrigued in Bergdorf Goodman is it goes on the block.
AFP by means of Getty Illustrations or photos

Arnault has “always been obsessed” with Bergdorf, according to a supply shut to Neiman Marcus. If LVMH manufactured an present, it would probably want to acquire the real estate from the present-day landlord, the supply additional. That is mainly because the lease for the flagship women’s store expires in 2050 — setting it up for a long term lease hike like the one particular that doomed Barneys.

A third future bidding bloc for Bergdorf, which according to resources already has expressed interest, consists of WeWork founder Adam Neumann and Sam Ben-Avraham, who had bid for Barneys in 2019. 

Reps for Ashkenazy and LVMH didn’t return a request for comment. Ben-Avraham by way of a spokesperson denied that he has expressed interest in Bergdorf Goodman.

Neumann declined to comment.

Insiders reported Bergdorf’s profits — which arrived at $650 million at their peak — plunged far more than 50 per cent all through the pandemic. Profitability, meanwhile, has tumbled to $20 million in Ebitda, or earnings ahead of interest, taxes and amortization, from a peak of $one hundred twenty million.

“A buyer will be obtaining into the probable rather than the overall performance of the model,” one particular supply shut to the firm reported. “Because the firm is carrying out so inadequately. It’s been a struggle.”

The aim has often been to make Bergdorf a $1 billion dollar business, a supply reported, but initiatives to beef up electronic profits have stalled. 

WeWork founder Adam Neumann wearing a white t-shirt with his arms outstretched.
WeWork founder, Adam Neumann, may perhaps purchase Bergdorf Goodman with a husband or wife.
Getty Illustrations or photos for WeWork

Just one state of affairs currently being talked over would involve Ashkenazy Acquisition joining a group that purchases Bergdorf. An edge of the aged Barneys house, situated at the corner of East sixtieth Street, is that it could home each the women’s and men’s departments in a single making, resources famous. At the moment, Bergdorf does business on each sides of Fifth Avenue at East 58th Street, with the greater women’s store on the west side reverse the men’s shop on the east.

In the meantime, Neiman has been boosting money and shoring up its stability sheet, exiting two major business leases close to its Dallas headquarters and promoting dear artwork it owns, which includes authentic nineteen seventies sketches by Halston, pictures by late fashion photographer Invoice Cunningham and a trove items collected by Stanley Marcus in the 1960s by way of the eighties.

In December, Neiman reaped $18.two million from the sale of a large mobile by Alexander Calder at a Sotheby’s auction. The Calder had been exhibited within the Hudson Yards store that shut forever final year.

Neiman also refinanced debt in March, saying it had no borrowings on a $900 million credit history line and had $two hundred million in money.