Neiman Marcus Posts $13 Million Loss on Acquisition Costs

Neiman Marcus reported that it lost $13.1 million in its first quarter just two months after the luxury retailer was acquired by Los Angeles-based Ares Management and the Canada Pension Plan Investment Board. The company's losses are largely due to more than $113 million in costs associated with the company's sale in October.

Despite the hit in net profit, sales at the Dallas-based retailer continued to climb, rising 5.7 percent to $1.13 billion from $1.07 billion a year ago. Same-store sales also increased a healthy 5.7 percent. Operating earnings for the first quarter of fiscal year 2014 were $32.1 million compared to $127.8 million for the first quarter of fiscal year 2013, which includes $109.4 million of transaction costs incurred in connection with the acquisition. Excluding these costs, operating earnings for the quarter were $141.5 million.

The $113 million in expenses related to the $6 billion acquisition include professional and management fees and $80 million in payments to executives and the retailer's former owners, TPG Capital and Warburg Pincus.

The sale of Neiman Marcus was made final in late October when the retailer closed out the final stages of a $6 billion purchase by Ares Management and Canadian Pension Plan Investment Board. Once the deal was completed, private equity firms TPG Capital and Warburg Pincus no longer had a stake in the company after buying the company for $5.1 billion in 2005 and taking it private.  

For more see:
-This Neiman Marcus earnings statement

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