Neiman Marcus

Will the Neiman Marcus Group road show go on?

Sources said the retailer’s move toward another initial public offering has been put on hold as the still-shaky stock market settles.

“They interviewed all the banks as the world started to fall apart in August and then started to step back and say, ‘We’ve got to watch the market a little more closely and then we’ve got to decide,’” said one financial source, who requested anonymity. “It could come back at any time.”

The source said the timing of the offering was “opportunistic” in that it was a bet on a promising U.S. stock market that turned sour almost immediately.

The window for an offering before the holidays is closing quickly. One retail source, however, pointed to rumors that “the Neiman Marcus IPO was off for this year.”

Neiman’s declined to comment.

The retailer filed its paperwork for an IPO on Aug. 4. Companies have to wait 21 business days before they can start pitching to investors in presentations known as a road show. Retailers often aim to come to market in the window between Labor Day and Thanksgiving, between the summer lull and the holiday rush.

But less than a week after Neiman’s filed its paperwork, China moved to devalue the yuan — an effort to keep the country’s supercharged growth from slowing too quickly but one that spooked investors around the world. Fears of a currency war and concerns about  future growth in China dominated the headlines, prompting teeth-rattling swings for investors. Since Neiman’s filed its intent for an IPO, the Dow Jones Industrial Average has fallen more than 1,500 points, or more than 8 percent, to trade near 16,000.

Before that, the market seemed to be more or less primed for Neiman’s, even though it had been held by its current owners for less than two years. Renaissance Capital said 70 companies raised a total of $12.7 billion with second-quarter IPOs. Nineteen of those companies were backed by private equity firms. Consumer offerings had performed particularly well.

An IPO, though, was always seen as just one of the retailer’s options in its “dual track” process, which included explorations of an offering and an outright sale to another investor. Neiman’s gave no indication in its initial filing of when it would launch the IPO, how many shares would be offered and at what price.

As for a sale of the business instead of an IPO, that might be tough since it would carry a high price. Ares Management and the Canadian Pension Plan Investment Board purchased NMG from TPG and Warburg Pincus two years ago for $6 billion, resulting in the retailer having to make large interest expenses in the range of $200 million to $300 million annually.

Neiman’s also is feeling the impact of the strong dollar, particularly in gateway cities such as Miami, New York, Las Vegas and Honolulu, where tourist spending has declined, and some wealthy domestic consumers have decided to spend more overseas.

Also, investors like to sense that a retailer has significant growth potential or value to be realized in its store base. Real estate is not seen as a big draw for the 41-door retailer, which owns the properties and buildings for only six of its stores, has ground or partial ground leases on 18 others and leases the rest of its stores outright. The company leases its Bergdorf Goodman stores and its Last Call doors.

The namesake chain also has limited expansion potential. The retailer operates full-line stores in most markets where there is a high-income clientele with an appetite for luxury goods. However, the company will open a full-line store on Long Island in February, in the Roosevelt Field Mall in Garden City, and in Hudson Yards, on Manhattan’s West Side, in 2018. The retailer continues to invest in renovating stores to boost already high productivity levels, and at the Bergdorf Goodman women’s store, there’s a comprehensive program of renewal in the works called BG 2020. NMG does consider e-commerce and the Last Call outlet business as growth opportunities, and last year, the company expanded overseas with the purchase of Mytheresa.com, a luxury Web site and retail store in Munich.

One financial source suggested that Neiman’s earnings last year fell below the expectations of some in the financial community, but there has been financial improvement. The Dallas-based luxury retailer last week reported that for the fiscal year ended Aug. 1, adjusted earnings before interest, taxes, depreciation and amortization rose to $710.6 million compared with $698.4 million the year before. Net earnings were $14.9 million compared to a net loss of $147.2 million in the prior year. Total revenues rose to $5.1 billion, a 5.3 percent increase, compared to $4.84 billion from the year before. Comparable revenues increased 3.9 percent.

Neiman’s reported higher capital expenditures of $270.5 million in the latest fiscal year, versus $174 million in the year-ago period. Interest expense was $289.9 million versus $270 million a year ago.

If Neiman’s does hit the brakes on an IPO, it would be the second time. In June 2013, when the company was owned by TPG and Warburg Pincus, the Dallas-based luxury stalwart filed a registration statement for an IPO, but instead the company was sold. TPG and Warburg Pincus bought Neiman’s for $5.1 billion in 2005.