Neiman Marcus

Neiman Marcus's 2020 bankruptcy forced a luxury department store institution into restructuring after 113 years of operation. The company that had defined American luxury retail—from Texas oil wealth to the famous Christmas catalog—couldn't survive private equity debt loads meeting COVID-19 demand shock. The mechanism failure was leverage timing. Ares Management and CPPIB's 2013 leveraged buyout loaded Neiman Marcus with $4.5 billion in debt just as luxury retail was shifting online and foot traffic was declining. The debt was manageable during normalcy but fatal during crisis. COVID-19 closed stores; debt payments continued. Neiman Marcus had no margin for error. The company emerged from bankruptcy with reduced debt and new ownership, demonstrating that bankruptcy can be a mechanism for survival rather than death. Neiman Marcus continues operating, albeit smaller and with a reorganized capital structure. The brand's cachet, real estate value, and customer relationships provided enough value to attract restructuring investment. But the original ownership structure was destroyed; private equity investors who loaded the company with debt lost their equity entirely. Neiman Marcus demonstrated that even luxury brands aren't immune to overleveraging—debt kills regardless of brand prestige.