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Neiman’s Deal Progressing

<P>NEW YORK — It’s been suspiciously quiet on the Neiman Marcus Group front but, according to sources, things are moving rapidly behind the scenes.<BR><BR>Neiman’s has been keeping a tight lid on the sale process, but bids could come...

This story first appeared in the April 12, 2005 issue of WWD.  Subscribe Today.

NEW YORK — It’s been suspiciously quiet on the Neiman Marcus Group front but, according to sources, things are moving rapidly behind the scenes.

Neiman’s has been keeping a tight lid on the sale process, but bids could come within the next few weeks. Two sources indicated that a consortium composed of Kohlberg, Kravis, Roberts & Co., Bain Capital and Vornado Realty Trust, appears to be emerging as among the most aggressive in the run-up to bidding. It’s the same consortium that earlier this year purchased Toys ‘R’ Us for $6.6 billion. However, that was largely considered a real estate deal, since Toys ‘R’ Us has about 1,500 locations worldwide. Neiman Marcus, with 35 Neiman’s locations and two for Bergdorf Goodman, will be bought primarily for its strong operations, earnings and status as the nation’s leading luxury chain.

Last month, the Neiman Marcus Group divisions, including the Neiman Marcus chain and Bergdorf Goodman, made presentations to potential bidders. The presentations were in off-site locations in Dallas, where the Neiman Marcus Group is located, and in New York, where Bergdorf’s is located.

The stock has performed terrifically this year and keeps creeping up on reports of an impending sale. On Monday, it closed at $93.75, up 75 cents from last week’s $93 closing price, for another 52-week high. In the past year, the stock was as low as $47.48.

As previously reported, other financial partnerships said to be vying for Neiman’s are Blackstone Group with Thomas H. Lee, and Apollo Advisors and Leonard Green & Partners. The Texas Pacific Group, possibly with a strategic partner, is said to be interested in Neiman’s as well.

Lately, there has been speculation that real estate firms will become more active in buying up retailers and that, aside from Vornado, some other real estate firm could partner in a consortium to buy Neiman’s, or perhaps another retailer. Kimco Realty Corp. has a history of investing in distressed retailers and selling off properties, and Simon Property Group is open to exploring retail investments. General Growth Properties could also be a player except that last year, it swallowed up The Rouse Co., another major real estate developer. GGP now has plenty of work ahead integrating Rouse and paying down the debt.

Several of the firms interested in Neiman’s are also checking out Saks Inc., which is said to be anxious to break up the company by selling off the department store group, Saks Fifth Avenue, or both.