Neiman Marcus Group, in bankruptcy proceedings since May 7, is moving forward on disposing stores.
Neiman’s is already in talks to vacate its store in Manhattan’s Hudson Yards and is now working with A&G Real Estate Partners to market four other locations, according to A&G.
A&G said Tuesday that the Neiman’s locations being marketed are the 87,608-square-foot unit in Walnut Creek, Calif.; the 126,296-square-foot unit in Mazza Gallerie in Washington D.C.; the 48,661-square-foot unit on Worth Avenue in Palm Beach, Fla., and the 124,637-square-foot unit in the Shops at Bravern in Bellevue, Wash.
It’s expected that Neiman’s list of store closings will grow, but the retailer is not commenting on any potential closings. The company also emphasized that assessment of stores could involve ways to monetize locations and not necessarily close them. Decisions would depend on Neiman’s outlook on the stores, their profitability, bankruptcy proceedings and negotiations with landlords.
“We are always assessing our store footprint to ensure it is optimal to enhance revenues, overall profitability, and our omnichannel strategy,” Amber Seikaly, vice president of corporate communications for the Neiman Marcus Group, said Tuesday. “This ongoing assessment may include marketing of leases for certain locations. This is not necessarily an indication that we are closing a particular store, but rather a way to monetize the value of the leases at these properties and allocate the proceeds toward investments that drive profitable and sustainable growth. Ongoing discussions with landlords are private and confidential.”
One possibility is closing the downtown Dallas unit, which is said to be an underperformer. It’s also where Neiman Marcus has its headquarters. Sources also have said the list of locations being eyed for possible closures includes St. Louis; Ft. Lauderdale, Fla.; Natick, Mass., and Westchester, N.Y.
A&G disclosed the locations it is working with on behalf of Neiman Marcus. Bankruptcy enables retailers to get out of leases without penalty.
“Offering long-term, multiple-option leases, the buildings are situated in prime, high-visibility retail districts or shopping centers,” said Emilio Amendola, co-president of Melville, N.Y.-based A&G.
A&G is a major player in retail real estate, and is particularly active this year in large part due to the pandemic and retail companies deciding to streamline their brick-and-mortar fleets, or go bankrupt. A&G has worked with Dress Barn, Toys ‘R’ Us, and Bon-Ton which have liquidated.
However, A&G also works with healthy retailers seeking to maximize their real estate. The company engages in real estate due diligence, valuations, dispositions, lease restructurings, acquisitions, structured investment sales, and growth opportunities.
“Real estate is a long-term play. These (Neiman’s) leases represent an incredible opportunity for retailers and investors to gain a foothold in markets that, under normal conditions, are renowned for their traffic and sales — as well as for their high barriers to entry,” Amendola said. “Additionally, some of these locations are particularly promising for conversion to hotel, office or residential use.”
Neiman Marcus entered its bankruptcy proceedings with intentions to restructure and come out as an ongoing business. As part of the process, Neiman’s secured debtor-in-possession financing of $675 million from creditors.
Since temporarily shutting down its entire fleet in mid-March due to COVID-19, Neiman Marcus reopened most of its locations for curbside pickups and by appointment shopping, with a couple of locations — Northpark Center in Dallas and Lenox Square mall in Atlanta — reopened for full in-store shopping.
The Neiman Marcus Group luxury retail fleet includes 43 Neiman Marcus stores and two Bergdorf Goodman stores.
The Related Companies, owner of the massive Hudson Yards mixed-used development on the west side of Manhattan, has begun marketing Neiman’s three-level, 188,000-square-foot space, and is in talks with Facebook, sources have said.