Yesterday, Reuters reported that Neiman Marcus ($PRIVATE:PRIV_NEIMANMARCUS) will seek bankruptcy protection as soon as this week, making it the first major American department store to surrender to pandemic era economic uncertainty. And it probably won't be the last.
The Coronavirus outbreak forced the Dallas-based company to temporarily close all 43 of its Neiman Marcus locations, about 24 Last Call locations, and two Bergdorf Goodman stores in New York.
Neiman Marcus was already facing challenges with looming debt, a lawsuit, and reduced foot traffic. As of this week, its item count has fallen 15% since January.
The company furloughed nearly 14,000 workers last month as the company struggled to maintain sales. Its LinkedIn employee headcount decreased by 2% so far this year. Back in December, it dropped by 10%.
And if NM’s social media engagement is any indication, its customers probably won’t feel like they’re losing much. Facebook mentions of the retailer are down 50% from the beginning of this month. They’ve fallen 75% since November.
Last week, Neiman Marcus forwent millions of dollars in debt payments. According to Reuters, the retailer is now negotiating a loan with its creditors totaling hundreds of millions of dollars. The loan would allow the company to continue some of its operations throughout bankruptcy proceedings.
Neiman Marcus has been attempting to tread water for the last few years. In a 2019 restructuring deal, the company pushed out due dates for its financial obligations while continuing to stack up interest expenses.
In an effort to avoid becoming a Coronavirus casualty, Macy’s and Nordstrom have been seeking out new financing. The debt-ridden J.C. Penney ($JCP) is considering filing for bankruptcy. As the Coronavirus outbreak accelerates the retail apocalypse, these companies could soon drown with Neiman Marcus.
About the Data:
Thinknum tracks companies using the information they post online - jobs, social and web traffic, product sales and app ratings - and creates data sets that measure factors like hiring, revenue and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.