Karen Karz...
Why didn't you use the bankruptcy court to fix your debt problem. NM has 4.5 billion in debt. You don't have enough employees to lay off to pay that off.
8 replies (most recent on top)
It's the store management that allows the "Indians to run the reservation" I have never seen anything like it. Our HR people claimed there is no late policy so there was no consequence for coming in late or for that matter leaving early. As a result we had 1 guy that was late every day and refused to take a break. This caused regular issues with other sales people. Regularly on Sundays the store would open and several departments would not have staff because they didn't show up for work. In the store I worked in two of the managers were married initially trying to hide it. The wife eventually was caught sleeping with the married merchandise manager. He left shortly there after and she was laid off in October of 2015. Around that same time the Loss prevention manager was arrested and fired for theft.😊 Basicly there are 4 Senior managers there that are protecting each other's jobs. The hr doors are always closed and I mean always ( I have never seen this before) One of the married hr people pretty regularly had a younger man stopping by her office ( he was on her volley ball team) and they were behind closed doors. Then there's the dog and pony show that's put on when executives visit. For about a week prior to the visit the focus of all managers becomes visit prep numbers trends individual sales etc. The stores inventory is also a mess. When the shipment arrives in the stores, the boxes are not accounted for, this results in overages and shortages. One store receives another stores inventory or it is just stolen before delivery. So anyway the store I worked in is in disarray and the top salespeople do whatever the want without consequence.
Other stores take the necessary steps in times of crisis, for Neimn logic seems to be far fetched
neiman marcus will run out of cash probably in 2017 its down to 42 million and that's with emergency loans. they also just lost 430 million in past two quarters..now they are even trying to rent clothes. they are a complete wreck, firing Katz would only be the start they need....as New competitors open more stores they are less relevant than ever ..
NM will go into bankruptcy, likely between 2018-2020. Problems began when TPG (and Warburg Pincus) drastically OVERPAID for the company when prior owners decided to auction it off. This was back in 2005 when economy was good. TPG figured that NM was too conservative opening new stores, which was partially right, but made dumb--s assumption that NM could grow from 34 full line stores to 52. Ain't that many markets in US to support such a luxury retailer. Also figured same store growth would continue...and that they could flip the company and IPO it with a great growth story to show by 2008. Two problems: the Great Recession and NM couldn't grow at the rate TPG projected. They and NM management tried some new concepts: expand into china via tiny acquisition of flash sales company, which ended up being a disaster which NM abandoned less than 2 years later; a new store concept to address a very real, legitimate issue for NM -- its customers are getting older and they're not appealing as much to younger women. So they spent lots of ti,e, money and (as usual management by committee, esp Katz who has to get knee deep into everything and has no "instinct" or strategic thinking skills. Outcome: CUSP, new chain of NM 'contemporary' apparel in specialty store format. But as usual, group,think led to an uninspiring concept woth the same merch in the regular stores. And it failed. TPG decided to get out in 2013 but only after doing a partial 'dividend recapitalization' where they paid themselves $500 million (and added same amount to NM debt) and found Ares Capital, another less sospticated private equity firm to buy it from them. 3 1/2 years later and same story -- sales are weak, nothing has changed. Katz blames: low oil prices (but they've been low for 2+ years so how is that suddenly a factor), the election (not a fan of who won, but stock market has rallied which helps NM wealthy clientele- another BS excuse); problems with NM1, a fancy term for fact that this company ran its catalog division on a different merchandise computer system, and as the internet business grew, they had more and more problems managing inventory between stores and internet (I can say that this issue was identified back in 2001, that the original guy they hired who developed their commerce business to $150+ million said this was a priority, but Katz and the others ignored it). Katz avoids addressing issues for fear of "rocking the boat" until the issues become so f---ing big that she has to do something. Had NM integrated systems 15 years ago, this wouldn't have been a very big deal, but they put it off and off, and now it is a huge deal and they're screwing it up. Now all of these issues --lack of any sustainable top line growth strategy, systems issues, customers who are approaching 70 years old and don't need to buy quite as much -- are all coming together to whack senior mgmt hard. Katz already has a HUGE senior management team given the company's size: herself as CEO, a COO/CFO (who just quit, never a good sign given he'd only been there for 2-3 years), a merchandising president, a president of stores and Online (was the latest guy running online but Katz gave him oversight of stores for some bizarre reason), a chief marketing officer, plus obviously needed CIO, chief legal, chief HR -- she has 4x as many C-level officers as predecessor -- honestly don't know what she does all day.
Anyway, bottom line is that they have almost $5.0 BILLION in debt, and while they just paid a bunch of money to extend payback on one piece of debt by three years, they cannot develop enough cash flow to have any chance of possibly paying it off. They'll probably enter a "pre-packaged" bankruptcy, meaning current owners (who will be wiped out) and debt holders (who will own the company) will have negoatiated the sale of certain assets plus taken control of company so NM may not be in bankruptcy too long. What will happen: completely new management to properly operate this company. It's not a high-growth company, but it desperately needs some new blood to figure out how to appeal to younger (under 50 year old) customers. And Katz can't do it. Ares would be smart to get ahead of what lays ahead by brining in an experienced retail executive who knows how to operate company's in financial distress, which is what NM is about to become. It will survive, but with a much delevered BS suitable for a mature slow growth company. They still MUST figure out how to appeal to younger customers. They have a horrible track record developing new concepts, so it will take fresh blood at the top to make this happen.
Neiman Marcus deserves to go bankrupt! All stores are a hostile working environment! Management are enept morons that don't have a clue how to make shopping a better experience for the few customers that still shop there. They promote inexcusable employee behavior and could care less about addressing store issues!
They have to get rid of all upper management including Katen Katz 2 million dollar a yr. salary! They know what stores are trending 80%
down over last year. There are many stores doing worse then the company's current trend. Why don't they get rid of those non productive managers and their co managers! It's obvious they are the problem. Neiman Marcus problems start at the top and pour all the down to the bottom of the bucket!
I believe the most recent articles as of 6/2016 now say they are $5 billion in the hole.
the company is 4.55 billion in debt and dropped its IPO for good reason . It was doomed from the start. I cover the company for a facebook page neiman marcus sucks.. if you have valid news tips please submit them.. we cover this well known criminal
Hahaha, this is so true, there is no way in hell she'll crawl out of that pile of debt