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Macy’s, Gap and Kohl’s have all had to close their doors and furlough workers since last month, when the country began to experience a spike in COVID-19 cases and deaths. One other mall retailer, JC Penney, may soon join Neiman Marcus in seeking bankruptcy protection, according to Reuters.
For Neiman Marcus, the financial woes began well before March. In recent years, the company had tried to delay bankruptcy protection and push out due dates for its financial obligations after a restructuring last year.
A trustee for some of the company’s bondholders sued Neiman Marcus last year, claiming the firm and its owners robbed investors of the value of its luxury e-commerce site Mytheresa by moving the business beyond the reach of creditors in a corporate reshuffling. Neiman Marcus maintains its actions were proper.
“In light of the significant headwinds stemming from the coronavirus pandemic and our expectation for a U.S. recession this year, we believe the company’s prospects for a turnaround are increasingly low,” Standard & Poor’s analysts wrote in a note last week.