According to a report in this morning’s New York Times, Burton Tansky, president and ceo of The Neiman Marcus Group Inc. (Dallas), has been in talks with New York investment bankers and consulting firms that may involve sale of the company.
The rumors have been reinforced by the fact that the company’s chairman, Richard Smith, now 81, has let it be known that he is thinking of selling his stock. Through his former company, GC Cos. Inc. (Boston), Smith took a big stake in Neiman’s parent in 1984, and the Smith family now controls the company.
“Neiman’s is the clear-cut leader in the luxury retail channel, and is at its apex right now,” Arnold Aronson, managing director of retail strategies at Kurt Salmon Associates (Atlanta), told The Times. “It would literally fetch a king’s ransom.”
The Times noted that the two Bergdorf Goodman stores in New York, which the Neiman Marcus Group owns, may be the hardest part of any deal. Bergdorf’s, which Neiman Marcus does not customarily break out in reporting sales and financial results, is believed to be doing worse than the Neiman Marcus chain.
According to The Times, there is no indication that Neiman Marcus has decided whether it will sell or use its increasingly valuable stock to make an acquisition. Nonetheless, it is one of the many luxury retail names being discussed as possible acquisition targets. Others include Coach Inc. (New York) and Tiffany & Co. (New York). Both have been riding the crest of improving sales.
Tiffany’s stock closed yesterday near its 12-month low. Mark Aaron, the head of investor relations at Tiffany, declined to comment on “market rumors.” But The Times speculated that either Nordstrom Inc. (Seattle) or the Saks Department Store Group division of Saks Inc. (Birmingham, Ala.), might interested in owning Tiffany’s.
“If Peter Boneparth [ceo of Jones Apparel Group, Bristol, Pa.] could buy Barneys, there’s certainly no limitation,” a retail consultant told The Times. Jones Apparel paid $400 million for Barneys New York in December 2004.
The Times said there is a common feeling among analysts and investment bankers and retailers that this is the time to make a deal. Aronson noted the well-reported feelers sent out by the Federated Department Stores Inc. (Cincinnati) to The May Department Stores Co. (St. Louis).
“The luxury companies are all selling at good multiples,” said Marvin Traub, the former chairman of Bloomingdale’s (New York-based division of Federated), who runs his own consulting firm. “So it’s an opportune time for some to monetize.” Said The Times: That is industry-speak for “sell.”