WASHINGTON (Pakistan Point News / Sputnik - 08th May, 2020) US luxury retail chain Neiman Marcus on Thursday said it has filed for bankruptcy amid the coronavirus (COVID-19) crisis, following in the trail of competitor J. Crew which became the first retail sector casualty to the pandemic throttling America's mall landscape.
"The Company has commenced voluntary Chapter 11 proceedings in the US Bankruptcy Court for the Southern District of Texas, Houston Division," Neiman Marcus said in a statement. "As part of the process, Neiman Marcus Group has secured debtor-in-possession financing of $675 million from creditors to enable business continuity throughout proceedings."
US retail data showed overall sales plunging 8.7 percent in March from February, for the biggest monthly decline in history, as the COVID-19 forced thousands of the nation's merchants to close and left millions of Americans without a paycheck.
J. Crew Group, which operates the J.Crew and Madewell brands, last week became the first national US retailer to file for bankruptcy protection since the coronavirus pandemic forced a wave of store closures. Sector analysts have said other highly-distressed retail chains such as Lord & Taylor, J.C. Penney, and Sears may follow.
Neiman Marcus said prior to COVID-19, it had been on a long-term profitable and sustainable growth path, expanding its luxury customer base.
"However, like most businesses today, we are facing unprecedented disruption caused by the COVID-19 pandemic, which has placed inexorable pressure on our business," it said.
The Commerce Department said the US economy shrank 4.8 percent in the first three months of 2020. It was the sharpest economic decline since the Great Recession of 2008/09 and came as COVID-19 shuttered non-essential businesses across America's 50 states from mid-March, before many began reopening last week.
The Labor Department said on Thursday that some 33 million Americans filed for first-time unemployment benefits over the past seven weeks, dealing a further blow an economy that it is 80 percent dominated by consumer activity.
