Sep. 9 - Sources say a consortium is close to a deal to buy luxury retailer Neiman Marcus. The news comes just two months after Hudson's Bay bought Saks. Fred Katayama reports.
The owners of 99c Only Stores is close to buying a luxury retailer that sells $3500 Prada bags, Neiman Marcus. Sources say the consortium, Ares Management and the Canada Pension Investment Board, could reach a deal as early as this week to buy Neiman for roughly $6 billion. That would be a billion dollars more than what current private equity owners TPG Capital, Warburg Pincus and Leonard Green Partners, paid for it in 2005 just before the start of the Great Recession. The consortium would get 41 Neiman Marcus stores as well as swanky retailer Bergdorf Goodman and some lower price chains. If completed, the deal would mark the second American luxury retailer snapped up by a Canadian concern and the latest buyout of a tony chain. In July, Hudson's Bay bought Saks for $2.4 billion. That same month, Neiman filed to go public after failing to reach deals with other potential buyers. The company earned more than $4 billion in revenues last year, its highest in five years. Its owners are racing to unload their investment that they've owned now for eight years - a long time for private equity - and take advantage of the strong stock market.