Neiman Marcus Group has talked about the possibility of going public for some time. The first sign of an initial public offering from the company came with their registration to pursue the venture. This happened in the summer of 2015.
Since then, there hasn’t been much to speak of the matter. The only true update came the following October when NMG announced they would continue to wait. This was based on the market at the time, which wouldn’t get any better. The first quarter of 2016 saw the fewest IPO’s in nearly seven years.
That has led us to the present. Neiman Marcus has officially announced their withdrawal from the idea in a recent statement.
“The company has determined that it is not in its best interests to proceed with the IPO contemplated by the registration statement at this time. The registration statement has not been declared effective by the commission, and the company confirms that no securities have been sold in connection with the offering contemplated thereby.”
Neiman Marcus Group now sits with the dilemma of deciding their next move. While ruling out going public, they could still sell the company. They could negotiate a transaction with a group of private equity investors.
Doing so would still be no easy task. After buying the company for $6 billion, NMG now carries $4.7 billion in debt almost four years later. This is due to many factors, one being a decline in the brand’s overall sales. They’ve had the same trajectory for five straight quarters to this point.
Karen Katz, chief executive officer at Neiman Marcus, spoke about the issue in a report from Business Insider’s Hayley Peterson this past December.
“There’s no question that our core customer is visiting us a little less frequently. Customers in general are less loyal to any one retailer and I think a lot of that is because of the price transparency of online,” Katz stated. “I think that’s here to stay. I don’t think that’s going to change.”
Neiman Marcus Group will need to decide their future soon. Regardless of the course of action, one is necessary to right the ship as we move into 2017.