Neiman Marcus Says It May Put Itself Up for Sale
Capitalizing on a white-hot luxury market, Neiman Marcus -- the department store chain whose name is synonymous with status shopping -- said Wednesday that it might put itself up for sale.
Neiman Marcus Group Inc. said that it was “exploring various strategic alternatives to enhance shareholder value,” including selling itself, but that it might end up doing nothing.
The retailer’s stock jumped on the news, as investors considered the prospect of a bidding war for the firm. Neiman Marcus’ Class A shares rose $11.29, or 15%, to $86.04 and its Class B shares rose $12.60, or 17%, to $84.80 -- both 52-week highs -- on the New York Stock Exchange.
Shares of Neiman Marcus have about tripled in the last two years as Neiman’s well-heeled customers have been among the first to benefit from an improving economy and have snapped up such items as Prada handbags and Manolo Blahnik shoes.
“Certainly Neiman is at the top of their game, and if ever there were a time to sell, this would be it,” said Allan Ellinger, senior managing director at MMG, a New York investment banking company that specializes in the apparel industry.
Last year, the firm earned $205 million, nearly double the year before, while sales rose 14% to $3.55 billion. Neiman Marcus’ same-store sales -- sales at stores open at least a year -- continue to beat Wall Street forecasts. Same-store sales in February rose a better-than-expected 7.7% from a year earlier.
Neiman’s announcement comes as deal-making mania appears to be taking hold in the retail sector. Federated Department Stores Inc. has agreed to buy May Department Stores Co., and Saks Inc. may sell or spin off its middle-market department store division to concentrate on its luxury unit, Saks Fifth Avenue.
Analysts said potential buyers for Neiman could include European luxury goods makers such as LVMH Moet Hennessy Louis Vuitton, North American private equity firms or Asian investors.
Neiman Marcus Group operates 35 Neiman Marcus stores but plans to close a Houston location in September. It also owns two Bergdorf Goodman stores, 14 Neiman’s clearance centers, plus catalog and Internet businesses.
