Luxury retailer Neiman Marcus files for bankruptcy over ‘unprecedented disruption’ caused by coronavirus

Neiman Marcus logomark and a temporarily closed note are seen outside one of the its store located in the Hudson Yards in Manhattan, New York. April 27, 2020.

Luxury retailer Neiman Marcus filed for bankruptcy on Thursday, becoming the first major department store chain to seek Chapter 11 protection because of the coronavirus pandemic.

The 112-year-old company, which was already in trouble before the COVID-19 crisis, said it secured $675 million in financing from its creditors to continue doing business throughout the restructuring proceedings.

The announcement comes just three days after apparel line J.Crew became the first national retailer to file for bankruptcy since the virus forced businesses across the country to close their doors.

“Prior to COVID-19, Neiman Marcus Group was making solid progress on our journey to long-term profitable and sustainable growth,” Geoffroy van Raemdonck, chairman and CEO of Neiman Marcus Group, said in a statement.

“However, like most businesses today,” he said, “we are facing unprecedented disruption caused by the COVID-19 pandemic, which has placed inexorable pressure on our business.”

The Dallas-based group, which has dozens of Neiman Marcus stores across the country, also runs three other luxury brands: Bergdorf Goodman, Last Call and Horchow.

Many of those locations have been closed for weeks to contain the spread of coronavirus, and the company has also implemented temporary pay cuts and thousands of furloughs.

The relentless pandemic and the lockdown orders that followed are likely to force many other retailers to file for Chapter 11 protection in the coming days.

A recent Department of Commerce report found that consumer spending has plummeted in recent months, causing a startling 4.8% drop in the nation’s gross domestic product in the first quarter of 2020.