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Neiman Marcus weighs selling a European asset

Neiman Marcus Group confirmed it is exploring the sale of its European-based luxury fashion website in a move that does not sit well with one of its creditors.

The retailer disclosed in a filing with the Securities and Exchange Commission that it is considering selling Mytheresa. The move comes as Neiman Marcus continues to focus on its core assets and look for ways to relieve its debt-heavy capital structure.

In the same filing, the company disclosed preliminary results showing that its third quarter (ended April 27) same-store sales are expected to fall 1.3% to 1.9%. The decline comes after recent quarters of comp gains. Neiman Marcus also expects to report a decline in adjusted earnings before interest, taxes, depreciation, and amortization for the quarter.

Neiman Marcus purchased Mytheresa in 2014. The purchase also included the Mytheresa flagship, located in Munich.

In the SEC filing, Neiman Marcus stated that “it has commenced a process to explore and evaluate strategic alternatives with respect to MyTheresa.” It added that “no decision has been made to pursue any specific transaction or other strategic alternative, and there can be no assurance that the exploration of strategic alternatives will result in the completion of any transaction.

Marble Ridge Capital, a Neiman Marcus creditor, reacted to the news about Mytheresa with a statement. In December, the hedge fund filed a lawsuit against Neiman Marcus alleging the fraudulent transfer of the retailer’s MyTheresa online business last summer. A Dallas judge threw out the suit in March.

"The Neiman Sponsors today announced the third step in what Marble Ridge contends is a scheme to place the valuable MyTheresa assets beyond the reach of Neiman's creditors,” Marble Ridge stated. “At the same time, the Sponsors continue to mismanage Neiman Marcus, as underscored by Neiman's just reported weak financial results. As we have communicated in the past, 100% of the valuable MyTheresa assets must be returned to Neiman Marcus."

In April, Neiman Marcus announced it had made a minority investment in Fashionphile, an online retailer of previously-owned ultra-luxury handbags, jewelry, and accessories.

“We believe that this strategic partnership with Fashionphile will allow us to expand into the pre-owned luxury secondary market and provide our existing customers with a broader range of services and offerings,” the retailer said in the filing. "As previously disclosed, in fiscal year 2019 we have been and remain focused on investing in initiatives designed to drive our multi-year transformation plan."
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