Neiman-Marcus Files For IPO, Looks to Raise Up to $100 Million

Luxury retailer Neiman-Marcus has filed for an initial public offering which could see its private equity owners raise up to $100 million. The company has returned to profitability in recent years as luxury spending has picked up, however shakiness in stock markets could be a perilous sign that the owners are selling at the height of the luxury goods market.

Private Equity Backed IPO

Nearly eight years ago, a private equity consortium led by TPG Capital and Warburg Pincus bought the retailer for $5.1 billion. Now, the company may look to return to public markets as the investors look to cash out on their investment.

The correlation of the stock market and luxury retail sales is strong and recent shakiness in the stock market could be a sign that these investors are simply cashing out at the top of the market. The company would not receive any proceeds from an offering and only the private equity investors would see cash from the deal.

Financial Improvement

The Dallas company operates 41 Neiman Marcus stores, two Bergdorf Goodman locations, and 35 discount shops under the Last Call brand. It also operates six Cusp stores, which cater to younger customers. Over the past two years, the company has returned back to profitability after years of losses during the financial crisis when luxury spending slowed.

For the first three quarters of the current fiscal year ended April 27, Neiman-Marcus reported revenues of $3.529 billion, showing growth of 5.66 percent from the three months ended April 28, 2012. Net income in the period rose to $160.8 million from $151.1 million, representing growth 6.4 percent on the bottom-line.

The company's liquidity position has also improved recently. The cash on the balance sheet has risen to $68.6 million while current liabilities fell $10 million from the comparable period a year ago. The company is also paying off its debt that was loaded on the balance sheet upon the LBO nearly eight years ago.