NEW YORK — Neiman Marcus Inc. has declared a one-time cash dividend of $442.6 million, or $435 per share of its outstanding common stock. The dividend was paid to stockholders at the close of business Wednesday. Neiman’s will use its cash on hand and borrowings from its revolving credit facility to fund the dividend. Neiman’s expects to borrow about $150 million for the dividend.
Neiman Marcus in 2005 was purchased by Texas Pacific Group and Warburg Pincus for over $5 billion. The dividend is an indication that the equity partners are eager to profit off their investment and are believed to be considering an initial public offering for Neiman’s, possibly later this year. A willingness to pay dividends would make Neiman’s more attractive to potential investors.
Investors also look for a company’s expansion potential. Earlier this month, Neiman’s announced spending $28 million to invest in Glamour Sales Holding, a privately held e-commerce business in China. Neiman’s intends to use Glamour’s technology to launch its own Web site in China at the end of this year and pump up Glamour’s existing flash-sale business.
Neiman’s needs to find new avenues for growth because there is little room left in the U.S. to open more Neiman Marcus full-line luxury stores. The company has been accelerating growth of its outlet and e-commerce businesses, and in the past has considered the possibility of opening additional Bergdorf Goodman locations. Company officials also have acknowledged that it is exploring sites overseas to open Neiman Marcus stores, but sources believe that Neiman’s is not close to locking in an overseas location.