A contractor enters a Neiman Marcus Group Ltd. store at the Hudson Yards development in New York, U.S., on Tuesday, March 5, 2019.

Demetrius Freeman | Bloomberg | Getty Images

Neiman Marcus, saddled with debt and hit by the coronavirus pandemic, filed for bankruptcy on Thursday.

The luxury department store chain had been struggling with competition from online rivals and dwindling cash before the pandemic. The health crisis exacerbated its problems, forcing it to furlough most of its 14,000 workers and close its 43 Neiman Marcus stores.

It is now the second major retailer to file for bankruptcy during the pandemic, following J. Crew’s filing earlier this week. It is likely not the last. J.C. Penney has also been exploring filing for bankruptcy. Many others are likewise forced to cope with sales that have been cut off and uncertainty over how people will shop in the future. 

Neiman Marcus said it has secured $675 million in financing from its creditors to fund operations through bankruptcy. Those creditors have also committed to a $750 million financing package that would fully refinance that financing and provide additional liquidity for the business once it exits bankruptcy. It expects to emerge from bankruptcy this fall.

The bankruptcy filing will help it eliminate roughly $4 billion in debt that remains as a memento from its sale to private equity firms to Ares Management and Canada Pension Plan Investment Board in 2013.

This is breaking news. Please check back for updates. 

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