TPG Capital (Fort Worth, Texas) and Warburg Pincus (New York), the two private equity firms that acquired the Neiman Marcus Group (Dallas) eight years ago, have filed for an initial public offering.
The action confirms weeks of rumors that the two investors are looking to sell the luxury retailer to take advantage of relatively robust stock markets.
TPG and Warburg Pincus had explored selling the company before, including in 2007, but held on as the weakening economy damaged its expensive acquisition. In 2009, the retail group – which includes the 41 Neiman Marcus stores and Bergdorf Goodman’s two New York stores – reported a $668 million loss.
Yesterday, the retailer disclosed that it earned $140.1 million last year, in addition to $4.3 billion in revenue, its best fiscal year since before the 2008 crisis. For the 39 weeks that ended April 27, 2013, it made a $160.8 million profit, up 6 percent from the period last year.
The New York Times reported that another large private equity firm, Kohlberg Kravis Roberts, approached the Neiman Marcus owners with a preliminary proposal to merge the retailer with Saks Inc. (New York), the country’s other luxury fashion retail chain, creating one of the biggest upscale department stores in the country. But TPG and Warburg Pincus were cool to the idea.
Now KKR is considered one of the potential suitors for Saks, along with the Canadian department store operator, Hudson’s Bay Co. (Toronto), which also owns Lord & Taylor in the U.S.