The owners of Neiman Marcus have agreed to sell the U.S. luxury department store chain to Ares Management LLC and the Canada Pension Plan Investment Board for $6 billion, ending a years-long effort to sell the company.
The Dallas-based retailer, which operates 41 namesake department stores, along with the famed Bergdorf Goodman store on Manhattan's Fifth Avenue and the Last Call outlet chain, was taken private by a group of investors led by private equity firms TPG Capital LP and Warburg Pincus LLC in 2005 for $5.1 billion.
"We think if you look at where we are in the cycle, it's a good time to buy this business," said Andre Bourbonnais, senior vice president of private investments at CPPIB, one of Canada's largest public pension funds and a global dealmaker whose assets including shopping malls, real estate and infrastructure.
"From a macro point of view, generally people feel more and more confident about the recovery in the U.S. and the sustainability of that recovery."
The buyers said they expected the deal to close in the fourth quarter.
Bourbonnais praised Neiman's management team and said the retailer would continue on a "business as usual" track, focusing on strengthening its online retail business and looking for opportunities to expand the brand geographically.
"There is no immediate plans for Canada but I think the management team will continue to look at it as part of their general growth plan and decide if and when it's advisable to come to Canada," he said.
High-end U.S. retailer Nordstrom said last year it would open its first four Canadian stores in the fall of 2014.
David Kaplan, co-head of Ares' private equity group, said in a statement that the firm shared Neiman's vision and praised the retailer's chief executive officer, Karen Katz.
Neiman has largely stopped opening new department stores, but has focused its attention on e-commerce and the expansion of the Last Call chain.
Bourbonnais said the fund was drawn in part by the expectation of an increase in U.S. luxury spending.
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