Neiman Marcus is permanently closing its Washington, D.C. store, the latest addition after the company first announced in July it would shutter four department stores and 17 off-price Neiman Marcus Last Call locations, according to court documents. The company was one of the first major retailers to file for Chapter 11 bankruptcy protection in May amid the coronavirus pandemic. “These store closures will help ensure the continued long-term success of our business and underscores our unrelenting focus on providing unparalleled luxury experiences and engagement,” a Neiman Marcus Group spokesperson said in a statement to Business Insider in July.
As part of its bankruptcy process, Neiman Marcus may permanently close four stores, in Walnut Creek, California; Palm Beach, Florida; Bellevue, Washington; and Washington, D.C., according to a press release from A&G Real Estate Partners, which is marketing the leases in partnership with Neiman Marcus Group.
“We are always assessing our store footprint to ensure it is optimal to enhance revenues, overall profitability, and our omnichannel strategy. This ongoing assessment may include marketing of leases for certain locations,” a Neiman Marcus Group spokesperson told Retail Dive in an email. “This is not necessarily an indication that we are closing a particular store, but rather a way to monetize the value of the leases at these properties and allocate the proceeds toward investments that drive profitable and sustainable growth. Ongoing discussions with landlords are private and confidential.”
Neiman Marcus is also reconsidering its Hudson Yards location in New York City, according to a report last month from Women’s Wear Daily. That flagship opened its doors for the first time a little over a year ago and remains closed due to the pandemic. With 43 Neiman Marcus stores nationwide, two Bergdorf Goodman stores in Manhattan and 22 Last Call locations (plus the luxury Horchow website), Neiman Marcus Group isn’t over-stored to the extent that Macy’s or even Nordstrom may be.
Still, the company remains overly reliant on large physical stores in malls, RevTrax CEO Jonathan Treiber previously told Retail Dive. The retailer filed under Chapter 11 in May, saying then that it expects to exit in the fall.
The process has been a little choppy, with the ongoing COVID-19 pandemic interfering with calculations like the value of inventory, which is affecting Neiman’s borrowing capacity. Overall, though, things appear to be proceeding more or less as the retailer had hoped.
As part of its $675 million debtor-in-possession financing agreement, the 113-year-old, Dallas-based retailer has a deal for lenders to take ownership, an indication they see underlying value in the business. But any smooth sailing through bankruptcy will give way to the challenges besetting malls, department stores and retail in general, which have been further complicated by the COVID-19 crisis.
Perhaps that’s why A&G is touting the four Neiman Marcus buildings with leases up for grabs — whether in part or in full — as potentially valuable structures for non-retail purposes.
“Real estate is a long-term play. These leases represent an incredible opportunity for retailers and investors to gain a foothold in markets that, under normal conditions, are renowned for their traffic and sales — as well as for their high barriers to entry,” A&G Co-President Emilio Amendola said in a statement. “Additionally, some of these locations are particularly promising for conversion to hotel, office or residential use.”
By Daphne Howland