(CBS Local) — Neiman Marcus has become the first American department store to file for bankruptcy protection during the coronavirus pandemic.
The Dallas-based luxury retailer filed for Chapter 11 restructuring in the U.S. Bankruptcy Court for the Southern District of Texas on Thursday. It plans to cede control to creditors in exchange for eliminating $4 billion of debt.READ MORE: Sunday's Show Info (12/5/21)
CEO Geoffroy van Raemdonck says the company was not liquidating and would come out of bankruptcy “a stronger company with the ability to better serve you and continue our transformation over the long term.”
On Monday, clothing chain J.Crew filed for bankruptcy, becoming the first major retailer to fall victim to the pandemic’s economic fallout. The clothing retailer said it had reached a deal with its lenders to convert about $1.65 billion of debt into equity.
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The coronavirus shutdown has hit Neiman Marcus so hard that the 112-year-old storied luxury department store chain is seeking Chapter 11 bankruptcy protection. https://t.co/hxsv4YTZF9
— CBSDFW (@CBSDFW) May 7, 2020
The filings come as many department and retail chain stores, already in a weakened state, are pushed into further peril by the coronavirus pandemic.
Lord & Taylor is preparing to liquidate its 38 department stores once restrictions to curb the spread of coronavirus are lifted, Reuters reports citing people familiar with the matter.
The nearly 200-year-old department store chain is getting ready for a bankruptcy process from which it does not expect to emerge, the report continued, but is holding off the filing and liquidation until it can reopen its stores to sell off the merchandise.MORE NEWS: 'Thousands Of Dollars In Damage;' Sacramento Sideshow Organizer Arrested In North Natomas
And JCPenney, facing a crush debt load of $3.7 billion, disclosed on April 15 that it missed a debt payment and that it was looking at strategic options during the 30-day grace period to make that payment.