The city of Dallas is not giving up on the iconic Neiman Marcus location downtown, which the luxury department store’s new owner says will close in a couple of weeks.
Dallas City Manager Kimberly Bizor Tolbert on Thursday sent a letter to HBC and Saks Global Executive Chairman Richard Baker requesting a meeting to discuss the March 31 closure of the downtown Neiman Marcus store. HBC late last year acquired the Texas-based luxury department store and its Bergdorf Goodman business for $2.7 billion and combined them with Saks Fifth Avenue and off-price chain Saks Off 5th to form Saks Global.
Tolbert said she and a consortium of civic leaders are “prepared to discuss an opportunity that you will find 1) financially beneficial to your company, 2) beneficial to the Neiman Marcus brand equity and the continued support, loyalty and goodwill with your Texas clientele, and 3) creative and doable.”
“We understand that you have previously publicly stated your desire to close the Neiman Marcus Downtown flagship, but we believe that by keeping it open a few months longer, you will have time to capture the opportunity we wish to discuss,” she also wrote.
Saks Global didn’t immediately return a request to comment on the latest outreach from Dallas. A member of the Dallas consortium declined to provide more details regarding the opportunity floated by the city manager.
The company so far has rebuffed the group’s efforts to reverse the decision to close the century-plus-old location. Saks Global originally characterized its decision as forced by an unresolved lease dispute involving a small parcel of land under the building. But the Dallas city and business leaders, after working with the landlord, have taken possession of the deed, clearing away the putative reason for shuttering the store.
Saks Global has said it will invest $100 million to upgrade the Neiman Marcus store at nearby NorthPark Center mall. It’s not clear how soon that could happen, given its strained finances. The acquisition required the company, which S&P Global Ratings analysts say has “a persistent free operating cash flow deficit,” to add to its debt load.
It has also struggled to pay suppliers for over a year. CEO Marc Metrick last month, in a memo to vendors acknowledging the problem, said payments wouldn’t be forthcoming until July and would be meted out in 12 installments. Saks Fifth Avenue’s fraught relationships with vendors have been impeding inventory flow and sales since before the Neiman Marcus acquisition. That and other factors put Saks Global at risk of throwing market share to rivals, notably Nordstrom and Bloomingdale’s, analysts say.
