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Neiman Marcus IPO aims for $100 million; equity owners seek exit

Meiman Marcus IPO registration papers were filed yesterday, with the company asking to raise the standard $100 million. Neiman Marcus' private equity owners are eyeing an exit for their long-held investment through the IPO. 

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M. Spencer Green/AP/File
The Chicago skyline is reflected in the exterior of Neiman Marcus on Michigan Avenue in Chicago in 2009. Luxury retailer Neiman Marcus plans to raise up to $100 million from an initial public offering of its common stock, according to reports.
  • By Phil Wahba Reuters

Neiman Marcus Inc filed registration papers on Monday for an initial public offering as its private equity owners eye an exit for their long-held investment in the luxury department store operator.

The Dallas-based retailer has been in the hands of private equity since 2005, when TPG Capital and Warburg Pincus LLC led a group that bought the Dallas-based retailer for $5.1 billion.

The IPO registration may signal little more than Neiman Marcus' desire to keep its options open. Private equity-owned companies routinely try to sell themselves to other companies or funds while they are also preparing for an IPO in a practice referred to by investment bankers as "dual-track."

Last month for example, Warburg agreed to sell eyecare company Bausch & Lomb Holdings Inc to Valeant Pharmaceuticals International for $8.7 billion after it had registered it for an IPO.

Private equity funds typically have a lifespan of ten years. Owned by private equity for eight years already, Neiman Marcus is considered a mature investment by industry standards.

Neiman, which operates 41 namesake departments stores, Bergdorf Goodman as well as the lower-price outlet chains Last Call and CUSP, would not receive any proceeds from the IPO, according to the prospectus filed with U.S. regulators. All shares in an IPO would be sold by existing shareholders.

The initial prospectus did not set out a timeline for the IPO, how many shares will be sold and by whom, nor on which exchange Neiman shares would trade. The company indicated it was asking to raise up to $100 million, but that amount is the standard used in many IPO filings as a placeholder to calculate a company's registration fees. The actual amount raised could be smaller, or, most likely in the case, larger.

During the 2008-2009 financial crisis, luxury sales plummeted in the United States. Neiman revenues had not yet recovered to pre-recession levels at the end of its most recent, complete fiscal year but are poised to for the fiscal year ending in late July.

Neiman, which competes most directly with Saks Inc, Nordstrom Inc and Macy's Inc's upscale Bloomingdale's chain, reported revenues in the nine months ended April 27 rose 5.7 percent to $3.53 billion while comparable sales were up 4.8 percent.

Saks reported comparable sales rose 4.4 percent in fiscal 2012, while for Nordstrom they were up 7.3 percent.

Neiman was the first high-end U.S. retailer to offer e-commerce and gets about 21.7 percent of sales on line, better than Saks and Nordstrom.

In its prospectus, Neiman said e-commerce would continue to be a major source of growth, including more sales to overseas shoppers. It also plans expand its Last Call and CUSP chains of small format outlet stores.

Private equity firms have been busy this year trying to cash out on portfolio companies: Other recent large deals involving private equity-backed companies include SeaWorld Entertainment Inc and Norwegian Cruise Line Holdings Ltd.

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