Next Chapter for Neiman Marcus
The $6 billion sale of Neiman Marcus, which the Dallas-based luxury retailer announced on Monday, "will be terrific for our business," said CEO Karen Katz, just before the start of the Donna Karan runway show, where Katz had a prime front row seat across from actress Goldie Hawn.
"We're very excited. We've been owned by our two private equity owners, TPG and Warburg Pincus, for eight years," she said. "We knew that we were going to have to figure out the next chapter for Neiman Marcus, and we had a lot of different options. We're really delighted that we are going to be with another private equity firm as well as the Canadian Pension Plan Investment Board.
"There will be no difference in how we interact with customers," Katz said. "That's what's most exciting. To them, it should be a very seamless change of ownership."
"They understand the brand of Neiman Marcus and Bergdorf Goodman, and they are going to invest capital in the business to help us grow. So we're very, very excited."
Katz and senior Neiman Marcus officials are attending fashion week, where they are looking at spring 2014 collections from a wide array of designers.
The new owners, Ares Management and Canadian Pension Plan Investment Board, will hold an equal economic interest in Neiman Marcus. The company's management will retain a minority stake.
The deal is expected to be finalized before the end of the year. No management changes are expected at Neiman Marcus, Katz said. "The management team is sticking around. Most of us have been at Neiman Marcus for most of our career. We're here for the long run. All of that is a very stable situation.
"There will be no difference in how we interact with customers," Katz added. "That's what's most exciting. To them, it should be a very seamless change of ownership."
The new owners have had experience in the retail sector, with investments in General Nutrition Centers and the 99 Cents Only chain of stores, which they purchased for $1.6 billion last year. "They've owned a number of retailers in and out of their portfolio, so they really do understand retail. I think they are every excited about owning a luxury retailer like Neiman Marcus," Katz said.
With the recent announcement that the Hudson's Bay Company in Canada plans to purchase Neiman's main rival, Saks Fifth Avenue, in a $2.4 billion deal, the luxury retail sector is in a state of flux. But Katz believes the changes will benefit Neiman's in the very competitive marketplace.
"When you change ownership, you get a new perspective on the business, a different set of eyes, different challenges," she said. "And I think that's really positive. Just having a different way to look at our business is going to be really helpful to us.
"They are really good people. They are very respectful of our brand. We got to spend a lot of time with them over the summer as a management team. I think it's really going to be a really, really great experience for all of us."