Neiman Marcus Group, the ultra-luxury retailer, is nearing a deal to be sold to an investor group of Texas Pacific Group and Warburg Pincus LLC for about $5 billion, The Post has learned.
Exact terms of the transaction are unclear. However, executives familiar with the matter said the TPG-Warburg group has offered to pay around $100 per share for the Dallas-based company, which was put on the block less than two months ago. Goldman Sachs and J.P. Morgan Chase are handling the sale.
The TPG-Warburg Pincus team was among the three private-equity pairs that submitted final bids for Neiman Marcus last Friday. The other two bidding teams were the Blackstone Group and Thomas H. Lee Partners LP, and Kohlberg Kravis Roberts & Co. and Bain Capital LLC.
Neiman’s board of directors met yesterday afternoon to approve the sale. Terms of the deal were still being finalized last evening. A deal was expected to be announced as early as today.
A Neiman Marcus spokeswoman couldn’t be reached for comment. Representatives for TPG and Warburg Pincus were unavailable.
The sale of Neiman Marcus comes amid a flurry of dealmaking in the world of retailing.
On Friday, Saks Inc. said it had agreed to sell its Profitt’s and McRae’s regional department stores to Belk Inc., a privately held retailer of stores, mainly in the Southeast.
Neiman Marcus has long been considered the pinnacle of luxury retailing. Known for its solicitous sales staff, $1,000 handbags, designer shoes and apparel, Neiman Marcus has steadily outpaced its closest rival Saks Fifth Avenue, and managed to increase sales even when much of the luxury market was depressed following the 9/11 attacks.
Burt Tansky, the longtime chief executive of Neiman Marcus, makes no apology for cultivating only the wealthiest clientele, and has been known to say, with a shrug, “I like rich people.”
A sale of Neiman Marcus would allow the Smith family, which controls the company and owns roughly 15 percent of its stock, to cash in on its investment at the height of a boom in luxury goods. Richard Smith, Neiman’s 81-year-old chairman, has made it known that he is ready to sell his shares in the company.
On Friday, the shares of Neiman Marcus closed up 12 cents to $98.32.
Now it will be up to the new owners to continue that growth, most likely by stepping up the opening of new stores to justify what many analysts consider a hefty purchase price.
Neiman Marcus operates 35 full-price stores, 14 Last Call clearance stores, and two Bergdorf Goodman stores. All told, the number of Neiman Marcus stores are far fewer than those operated by Saks Fifth Avenue, leading some analysts to argue that there are many untapped markets for Neiman Marcus.
But other observers caution that rapid-fire expansion has tended to prove troublesome for many retailers, and note, specifically, that Saks Fifth Avenue has, in recent months, been closing some of its underperforming stores.