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Neiman Marcus May Put Itself Up for Sale

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People walk in front of the Neiman Marcus department store in Marcus Square, Wednesday, March 16, 2005, in downtown, Dallas. The retailing company whose name has become synonuymous with luxury shopping, is considering putting itself up for sale. (AP Photo/Tony Gutierrez)

DALLAS - Capitalizing on a white-hot luxury market, Neiman Marcus

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Good. More space for the proposed uber mixed use deelopment.

NOW, I really hope this will not screw the Galleria over, especially with Foley's sale a few weeks back (and who knows if it will stay open, or turn into something else.) As long as Macy's, or whoeve owns Macys does not buy NM, then the Galleria should be fine.

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Neiman Marcu in Town and Country will stay and complement the new mix-used development that is planned there. At most it may have a name change. It could just be a buyout but not a name change.

Foley's may keep its name also, Macy just owns it.

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Neiman Marcu in Town and Country will stay and complement the new mix-used development that is planned there.  At most it may have a name change.  It could just be a buyout but not a name change.

Foley's may keep its name also, Macy just owns it.

Actually....

It said Wednesday it would close an underperforming store in Houston's Town & Country Mall, which employs 160 people, but retain one in Houston's Galleria.
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Neiman's to close one store

Town & Country location will end 22 years at mall

By NANCY SARNOFF and DAVID KAPLAN

Copyright 2005 Houston Chronicle

Neiman Marcus, the lone retail survivor at a vanishing Town & Country Mall, is finally bowing out.

Ending a 22-year run at the west Houston shopping center, the luxury department store will close in September, its parent company announced Wednesday.

In a separate announcement, Dallas-based Neiman Marcus Group said it has hired Goldman Sachs & Co. to help "evaluate strategic alternatives to enhance shareholder value," including the possible sale of the company. Neiman Marcus Group operates Neiman Marcus and Bergdorf Goodman stores, as well as print catalog and online operations.

The Town & Country store was not meeting its "long-term operational goals," said Ginger Reeder, a spokeswoman forNeiman Marcus Group. She would not talk about the store's fiscal performance.

Neiman Marcus is the only retailer left at Town & Country, which is being demolished by its new owner, which plans to redevelop the site.

The 160 employees who work there will be offered transfers or severance packages, Reeder said.

Not a struggling company

An analyst said Neiman's is not a struggling company that needs to unload poor-performing locations to be more appealing to potential buyers.

"The company is doing great

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How is the demo coming along. I was over there about about a month ago and it was about 3/4's demoed. I thought to myself at the time that there was no way Neimans could sustain itseld alone with all that rubble everywhere. I remember when that mall opened. We used to hit the Arcade on the third floor at will. I think it was called Tilt.

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Not surprised at all to see Neiman's close that store; in fact, I can't believe they waited this long to do it. They always claimed it was profitable and going to stay there for the long term, but they had reduced hours and there were hardly ever that many customers in the store.

As for them putting themselves up for sale, let's just hope that neither Nordstrom nor Federated buy them. Otherwise we could see another anchor in the Galleria close or change formats, and a Federated purchase could put nearly all of the anchor spots in the mall under one company's umbrella. I think it's bad enough that we're probably going to lose the Foley's name and possibly see another anchor spot in the Galleria become vacant within the next two years.

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Read through this article, from the sounds of it they are not targeting other retailers for its purchase. I'm suspecting another private investor will purchase NM, as has been the case previously.

Neiman's seeks exclusive buyer

Retailer explores its options, including sale

11:30 PM CST on Wednesday, March 16, 2005

By MARIA HALKIAS / The Dallas Morning News

Who wouldn't want to own Neiman Marcus?

JOHN F. RHODES/DMN

Neiman Marcus' flagship store in downtown Dallas opened in 1907. The chain has 35 stores nationwide. The Dallas-based retail jewel has reached an unprecedented level of success as the world's leading luxury retailer, but the list of potential buyers is as exclusive as the company's most elite shoppers.

After weeks of rumors that it is for sale, Neiman Marcus Group confirmed on Wednesday that it has hired Goldman Sachs & Co. to explore alternatives, including the sale of the company.

Analysts expect private investor groups and leverage buyout firms to eagerly prepare offers. They don't expect bids from other retail companies, which usually look for ways to save costs or gain market share and real estate positions in a merger partner.

Neiman Marcus' stock price soared 15 percent to close at $86.04 a share Wednesday. Even before the run-up, Neiman Marcus' stock price had reached record levels along with its profits and sales.

The timing of a possible sale is widely being viewed as a way for the Smith family of Boston to cash in on its investment, which dates to 1984.

Richard A. Smith, then chairman of the General Cinema theater chain, made a $300 million investment in Carter Hawley Hale, which owned Neiman Marcus at the time. Three years later, Mr. Smith bought Neiman Marcus outright.

Smith's legacy

As chairman of Neiman Marcus Group, Mr. Smith's legacy is that he hired the best people, including current CEO Burt Tansky, and let them follow a strategy to become the best specialty luxury chain.

Under Mr. Smith, now 80, Neiman's sales went from less than $1 billion per year to $3.5 billion in 2004.

Also Online

Neiman Marcus seen as part of Dallas' heritage

Neiman Marcus execs and board members

Tell Us: How do you think Neiman Marcus will change if it's sold?

"The proof is in the pudding. Neiman Marcus dominates the luxury space today, and it didn't get there on a short view of life," said Richard Marcus, former chairman and chief executive of the chain founded by his family in 1907.

"We all knew the Smith family at one point would sell their investment. They aren't required to hold it for a millennium."

Finding a buyer shouldn't be hard, retail experts say.

"There's no question today that Neiman Marcus is the premier luxury specialty store in the world," said Arnold Aronson, managing director of retail strategies at Kurt Salmon Associates. "It still has some growth potential. But someone who buys it now either has to have a creative agenda to take it beyond the current store or be someone who wants a trophy."

Retailer bids unlikely

Neiman Marcus doesn't provide many advantages for another retailer looking to expand geographically or save back room operating costs, Mr. Aronson said. "And it's not a real estate play," with 35 stores nationwide and two Bergdorf Goodman locations in New York.

A look at Neiman Marcus' history

1907 The first Neiman Marcus store opens in downtown Dallas.

1951 A second store opens in Preston Center; it moves to NorthPark in 1965.

1969 The company is sold to Broadway-Hale (later called Carter Hawley Hale).

1972 Carter Hawley Hale buys Bergdorf Goodman in New York.

1973 Stanley Marcus is promoted to chairman and CEO of Neiman Marcus.

1987 General Cinema buys Neiman Marcus and Bergdorf Goodman from Carter Hawley Hale.

1988 Neiman Marcus buys the Horchow Collection.

1989 The company reaches $1 billion in assets.

1991 General Cinema buys publisher Harcourt Brace, and the parent company is renamed Harcourt General.

1999 Harcourt General spins off a majority of Neiman Marcus and Bergdorf Goodman as a separate company, Neiman Marcus Group, but retains a minority interest.

2005 Neiman Marcus Group hires Goldman Sachs to locate potential buyers.

SOURCES: Women's Wear Daily; Dallas Morning News research

"This is already a well-run company, and it doesn't provide a big rollout opportunity. It's not poised to have 100 new stores built," said Mr. Aronson.

Mr. Marcus, a senior adviser to Peter J. Solomon Co., a New York investment banking firm, said he believes leverage buyout funds are the most likely buyers. At Wednesday's closing price, Neiman's market value was $4.2 billion, and presumably shareholders would want a premium above that to sell out.

The Smith family owns 12.7 percent of total outstanding shares, including almost a third of Neiman's powerful Class B shares, according to the most recent proxy statement filed last November.

Class B shareholders control the company's board of directors.

Neiman Marcus co-vice chairmen are Robert Smith, 45, and Brian Knez, 47, son and son-in-law of Richard Smith.

Hugh Mullins, former Neiman Marcus Stores chairman and CEO and current chairman and CEO of Harold's Stores Inc., said the Smiths have been great partners.

"They allowed management to make decisions not based on quarterly results. I remember after the stock market crashed in October 1997 we were worried because the Neiman Marcus customer spending habits are parallel to the perception of their wealth."

Long-term vision

There was no panic or pressure to bring in lower-priced merchandise to attract a broader group of shoppers, he said. "They said don't do anything that would hurt the long-term vision to be the best luxury retailer in the world."

BETSY BOCK/Staff Artist "That's why no one in the world has this collection of merchandise all in one place with great service," Mr. Mullins said. The two are hard to find."

Billy Payton, president of the retail division at Brierley & Partners in Dallas and a former Neiman Marcus executive, said the Smiths were never "Monday morning quarterbacks."

"The challenge now is for someone to continue that long-term patience and to come up with a new vision," Mr. Payton said.

"That's why this company is on top after 100 years. Every 20 years or so, something breathes new life into it."

Neiman Marcus vice president Ginger Reeder said there is no time frame set for Goldman Sachs' analysis and the process may not result in a specific transaction.

Mr. Marcus said the company has already been talking to potential bidders and doesn't expect the process to take more than a couple of months before a decision is public.

Email mhalkias@dallasnews.com

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  • 8 months later...
It's lit up like that every year during the holiday season. Although, it appears they may have added a few more ornamental features this year.

yeah, that looks quite a bit more lit up then last year. same base decorations, with more added, at the brink of overboard - but still looks nice.

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For some reason I thought they had closed that one. Good to see its still there

Its their flagship store, they have no intention of closing it. From what I understand with all the resurgence around downtown and uptown, they have really seen sales pick up. This coming from a long time associate I talked with who works their. She said sales slumped when downtown went dead, but in the past 6 or so years they have really scene sales pick up. But then she also let me know about 80 percent of their business comes from personal shoppers that account for 10 percent of thier customers, and not the casual shoppers in the stores.

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Old news, but did any of you Houstonites know that Neiman's if partly owned by a FORT WORTH firm??? DFW's WFAA Channel 8's web sight had the following in it's archives. FW getting a little more classier ;)

Neiman Marcus agrees to buyout

11:00 PM CDT on Monday, May 2, 2005

From Staff and Wire Reports

John David Emmett / DMN

Neiman Marcus Group Inc., an icon in luxury retailing, said Monday it has agreed to sell its chain of department stores to two private investment firms for about $5.1 billion in cash.

Texas Pacific Group, based in Fort Worth, and New York-based Warburg Pincus agreed to pay $100 per share for Neiman Marcus, which operates 35 Neiman Marcus stores, a Bergdorf Goodman women's store and a Bergdorf Goodman men's store. The price is a slight premium to Neiman Marcus' closing price of $98.32 on Friday but is more than 25 percent higher since mid-March when the company announced it was considering putting itself up for sale.

Some Dallasites worry the ownership change could result in the closing of the chain's flagship store in downtown Dallas.

"Since I was a little girl we shopped in downtown Dallas at that store," said customer Mary Beth White. "I can remember being there, 3 or 4 years old, having lunch with my mom."

Legendary local figure Stanley Marcus left Neiman's 30 years ago and died in 2002, but strong roots and a solid reputation have kept the retailer looking good.

And while some worry about the stores losing their Lone Star connections, Neiman Marcus officials said many people forget - or maybe didn't know - that a Boston company has owned the chain since 1969.

Shares fell $5.10, or 5.3 percent, to $92.10 in midday trading on the New York Stock Exchange as investors sought to lock in profits.

"We are very pleased with the results of our strategic review," said Neiman Marcus Chairman Richard A. Smith. "This transaction provides outstanding shareholder value and represents an endorsement of the excellent performance of our entire team."

Smith and his family, who own a "significant" portion of Neiman Marcus' stock, separately agreed to vote their shares in favor of the transaction, the company said.

The acquisition is the latest in a flurry of retail deals in the last few months, fueled by private equity firms that are flush with cash as well as heavy cash flows from the likes of merchants like Federated Stores Inc., who feel the way to grow in an overall stagnant apparel market is to gobble up other chains.

On Friday, Saks Inc., the Birmingham, Ala.-based department store operator, said it is selling its Proffitt's and McRae's department stores to privately held retailer Belk Inc. for $622 million in cash as it considers selling its northern mid-priced department store group.

Saks, however, said it will retain and continue to operate its luxury Saks Fifth Avenue Enterprise division, as well as its upscale Parisian stores.

Texas Pacific, which manages over $15 billion in assets, has investments in a number of companies including the retailers Petco, J. Crew and Debenhams and the fast-food restaurant company Burger King. On Sunday, its investment in Lenovo, the new chinese owner of IBM's personal computer division, was confirmed.

Warburg Pincus has about $13 billion under management and invests in the financial services, health care, media and energy industries as well as real estate.

Investment banks Goldman Sachs and JPMorgan both advised Neiman Marcus on the deal.

The Associated Press and WFAA-TV's Karin Kelly contributed to this report.

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  • 2 weeks later...
  • The title was changed to Neiman Marcus Dallas

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