Luxury retail giant Neiman Marcus filed for Chapter 11 bankruptcy protections on Thursday. It's the largest retailer to do so amid the coronavirus pandemic.
Its CEO, Geoffroy van Raemdonck, said the company, which was about $5.1 billion in debt, was "on track" before COVID-19. However, the virus, combined with massive interest payments, "threw everything off track." He described bankruptcy as "an opportunity to reset our financial structure."
The bankruptcy protection will help take care of $4 billion of the company's debt. Meanwhile, the department store chain's creditors have committed $675 million in financing to keep the business afloat and another $750 million to help the company recover by early fall.
Another retail giant, J.Crew, also filed for bankruptcy on Monday. And J.C. Penney could be next. All three retailers were already facing large amounts of debt before the pandemic, but amid store closures and furloughs, they're feeling additional impacts.
The Wall Street Journal reports that although Neiman Marcus had to close its stores and furlough most of its workers in March, digital sales increased by double digits in April.
After filing for bankruptcy, Neiman Marcus' CEO assured customers the high-end retailer is not liquidating and that it will "emerge a stronger company with the ability to better serve you and continue our transformation over the long term."
Contains footage from CNN.