Luxury Retailer Neiman Marcus Sets Up for Possible IPO

Neiman Marcus is ready to hit the public stage again nearly eight years after TPG Capital and Warburg Pincus LLC acquired the luxury retailer. The company recently filed for an initial public offering valued at $100 million in stock, according to The Wall Street Journal. The timing is certainly right. In fact, high-end retailers including Neiman Marcus and Nordstrom (NYSE: JWN  ) are finally starting to benefit from the economic recovery. However, that's no guarantee that there will be strong demand for an IPO.

Package deal gone bad
The news comes after Neiman Marcus reportedly snubbed an offer from private equity firm KKR (NYSE: KKR  ) , which was considering an investment in rival upscale retailer Saks (UNKNOWN: SKS.DL2  ) with the hope of later merging the company with Neiman Marcus, according to the Journal. It's understandable why Neiman would look down on the deal.

For one thing, Neiman Marcus is far more profitable than Saks. The former pulled in $140 million in profits on revenue of $4.35 billion last year. Comparatively, Saks earned just $62 million on sales of $3.15 billion during its most recent fiscal year. By turning down a possible merger with rival Saks, Neiman's private equity owners are hoping for a lucrative public offering.

There's no reason Neiman's upcoming market debut can't go the way of Michael Kors (NYSE: KORS  ) . Since going public in 2011, the namesake brand has shown impressive momentum. In fact, shares of Kors have nearly tripled from their IPO price of $20 per share. Not to mention the stock is up more than 15% on the year.

However, if Neiman Marcus hopes to have this type of IPO success, it will need to prove that it's capable of strong growth going forward. For example, Kors grew total revenue by 58% in fiscal 2011, the same year it went public. So far, Neiman is on the right track, with improving same-store-sales figures and earnings growth of 13% in its most recent quarter.

Reining in retail stocks
While we wait for a possible public offering from Neiman Marcus, there are plenty of other attractive retail stocks already trading -- the trick is knowing where to look.

The retail space is in the midst of the biggest paradigm shift since mail order took off at the turn of the last century. Only those most forward-looking and capable companies will survive, and they'll handsomely reward those investors who understand the landscape. You can read about the 3 Companies Ready to Rule Retail in The Motley Fool's special report. Uncovering these top picks is free today; just click here to read more.


 

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  • Report this Comment On March 13, 2014, at 1:03 AM, adamsilber wrote:

    The recent Neiman Marcus data compromise appears to reveal a desperate state of affairs under Karen Katz CEO.

    The following are very serious matters THAT the public should know of :

    Despite EEOC laws in America the company has not actively addressed the following:

    Customers and employees are said to "act like Jews" .

    Asian Americans are said to look "extra Asian " by its own Management.

    Entire Departments may have no Latino employees for years despite having qualified applicants.

    The company's HR department apparently attempts to conceal this by hiring low level janitorial positions. This may be used to skirt equal opportunity..

    Management has called gay male employees "Fags" .

    " Fire him he has HIV" was stated by a different Department Manger

    That employee working in the N.M. Café would prepare food without gloves. He used unwashed hands and cut fingers.

    The company has a questionable food safety record . It may not have followed food safety laws and perhaps does still not.

    A Neiman Marcus employee bled in prepared food through an open wrist bone wound.. When asked by The United States Government to respond, the company stated they are not applicable under the law. OSHA in Washington D.C was notified . The company never directly answered as to why it did not adequately protect its customers. The company shifted the blame to Liberty Mutual Insurance who had at that point not been aware.

    In another recent publicized case Neiman Marcus was implicated in forging fake documents to smear an African American ex employee . This pattern of discrimination is very disturbing . Another abusive tactic Neiman Marcus utilizes is to have suspected African American's shoplifting cases moved to different judges courts. . This according to company Management allows an increase in the time they spend in jail . The company reportedly pays the Court to honor its request to switch judges it deems as not sympathetic to Neiman Marcus. The United States Department of Justice has been made aware of this.

    Additional concerns include that the company has failed to pay wages properly and is known for retaliatory issues (Neimanmarcuslawsuit.com)

    It now has another pending class action lawsuit for the data compromise.

    The company claimed that one of it's former manager's is a "pedophile". Interestingly they gave him a positive reference to work at Chuckie Cheese Pizza (Owned by Apollo Management). This despite the fact it is a business aimed at children where a danger may be present.

    .

    Ms. Katz should seriously consider resigning as it is questionable as to her stewardship of Neiman Marcus

    Sources - DOL, OSHA, U.S Dept. of Justice complaint., EEOC records,

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