Neiman Marcus, the luxury retailer that filed for an initial public offering in June, is close to an agreement to sell itself to Ares Management and the Canada Pension Plan Investment Board for $6 billion, two people with knowledge of the matter said.
A deal with Neiman’s private-equity owners, TPG Capital, Warburg Pincus and Leonard Green and Partners, could be announced as soon as today, said one of the people.
An agreement hasn’t been reached yet and the talks could still fail, said the people, who asked for anonymity because the negotiations are private.
Neiman’s owners, who paid about $5.1 billion for the Dallas-based retailer in 2005, have been considering an IPO if they don’t draw a bid that meets their expectations, people familiar with the plan said last month.
Revenue at Neiman hasn’t returned to the level seen before the 2008 financial crisis at Neiman as luxury shoppers have been slow to return to stores.
“Neiman is an excellent brand and an excellent company,” Michael Appel, founder of Appel Associates , a retail consultancy, said in a phone interview yesterday.
“The question is what can the buyers do with it? Hope springs eternal. Perhaps they feel that their management and their ability to work with companies will get them the return they are looking for.”
Ginger Reeder, a spokeswoman for Neiman, declined to comment. Revenue at Neiman rose 8.6 per cent to $4.35 billion in the fiscal year ended July 28 2012. The company runs 41 stores under the same name across the US and two Bergdorf Goodman department stores on New York City’s Fifth Avenue, according to its IPO filing.
Luxury spending in the Americas grew 5 per cent on a constant-currency basis in 2012, less than half the 13 per cent gain of the previous year, according to Bain and Co estimates.
An acquisition of Neiman would be the second deal in the luxury retail industry in recent months.
Hudson’s Bay agreed to buy Saks for $2.4 billion in July, combining Canada’s largest-department store chain with one of the most prestigious US luxury retailers in a deal that may spur the creation of a real estate investment trust.
The transaction, which brings together the Lord and Taylor and Saks Fifth Avenue brands, creates a company that will operate 320 stores.
The possible deal comes at time when the US retail sector has cooled as some consumers have switched their spending to bigger items including cars, homes and home furnishings.
The chains that sell apparel and other discretionary goods have suffered, including Nordstrom and Macy’s , which reported second-quarter sales that trailed analyst estimates.
Bloomberg
