“It’s Collapsing Violently”: Coronavirus Is Creating a Fast Fashion Nightmare
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Neiman Marcus files for bankruptcy
11–20 of 276 posts
Re: Neiman Marcus files for bankruptcy
#12I think even without Covid, its harder to tell what is luxury in apparel. There have been a couple articles on this. There used to be a clear difference between the look of clothes at different retailers but not as much anymore. Walk through Neiman Marcus, Nordstrom, Macy's, H&M, and they start to blend together. Doesnt mean no difference but maybe not enough to always charge a premium.
>Doesnt mean no difference but maybe not enough to always charge a premium.
Thats why people call Neiman Marcus 'needless markup' :D
Re: Neiman Marcus files for bankruptcy
#13First guess: private equity? Neiman Marcus, laden with debt after a private equity takeover, Yup.
Same with J Crew.. real value creators these PE people are
PE does create value!
They take over companies that are in a liquidity crisis. They bring buckets of cash with them that gets the company out of the liquidity crisis. Suddenly, the value of the company increases dramatically because creditors can't take advantage of it anymore.
PE doesn't takeover companies they think can make it. Regular investors would do that. They take over companies that everyone knows are doomed.
The equation is like a curve. The price point starts at 0, shortly after providing liquidity, the price dramatically recovers. But, in the long run, the price will return to 0.
The equation PE is trying to solve, and the risk they take is: Can they make enough money selling assets in the brief inflated period to make up for the inevitable loss at the end of the curve.
They're signing up to hold a bag, and they know it. They're not buying Great American Companies. By nature, no one else would do it, or they wouldn't have been able to do the takeover.
Re: Neiman Marcus files for bankruptcy
#14I hope individuals and businesses start saving again. When I was a kid, everyone saved money. We spent it too, but we all saved for rainy days. Maybe that idea will make a come back now. Be prepared. You never know what may happen.
I agree, but if they do we're in for a looooong recovery. If we're not already.
Re: Neiman Marcus files for bankruptcy
#15Lord & Taylor next
Re: Neiman Marcus files for bankruptcy
#16I think even without Covid, its harder to tell what is luxury in apparel. There have been a couple articles on this. There used to be a clear difference between the look of clothes at different retailers but not as much anymore. Walk through Neiman Marcus, Nordstrom, Macy's, H&M, and they start to blend together. Doesnt mean no difference but maybe not enough to always charge a premium.
There's also been a huge trend reversal on "conspicuous consumption". Even the wealthy now do their wealth-signaling through minimalism, instead of flash and excess. Self-proclaimed "luxury brands" have a dwindling market.
Re: Neiman Marcus files for bankruptcy
#17I hope individuals and businesses start saving again. When I was a kid, everyone saved money. We spent it too, but we all saved for rainy days. Maybe that idea will make a come back now. Be prepared. You never know what may happen.
I agree, but if they do we're in for a looooong recovery. If we're not already.
Yes. We should not go over board. Keep spending and supporting local businesses, but save some too. Say 15% of your earnings. Put it in the bank.
I remember when my wife tried to get a credit card right after we got married. She could not get one. Back then, there was only Visa and Mastercard. Then Discover card came out and she was able to get one with a very low limit. She used that to build her credit over the years. Today, the grand kids get card offers in the mail several times a month. We need to be somewhere in the middle and not at either extreme.
Re: Neiman Marcus files for bankruptcy
#18I think even without Covid, its harder to tell what is luxury in apparel. There have been a couple articles on this. There used to be a clear difference between the look of clothes at different retailers but not as much anymore. Walk through Neiman Marcus, Nordstrom, Macy's, H&M, and they start to blend together. Doesnt mean no difference but maybe not enough to always charge a premium.
There's also been a huge trend reversal on "conspicuous consumption". Even the wealthy now do their wealth-signaling through minimalism, instead of flash and excess. Self-proclaimed "luxury brands" have a dwindling market.
Do the numbers reflect this? I'm just looking at the stock prices of a few luxury companies like LVMH and and Kering and it seems they were are at all time highs prior to COVID.
Re: Neiman Marcus files for bankruptcy
#19First guess: private equity? Neiman Marcus, laden with debt after a private equity takeover, Yup.
Wow, why don't people wise up to this PE trick? Seems like creditors would learn their lesson after so many examples...
The "creditors" are usually another shell company of the PE firm, and the interest rates are absurd (I looked into the collapse of Maplin and it was something like 20%). It's basically an accounting trick to remove profits from the victim company in its declining years without having to pay tax on them.
Re: Neiman Marcus files for bankruptcy
#20I hope individuals and businesses start saving again. When I was a kid, everyone saved money. We spent it too, but we all saved for rainy days. Maybe that idea will make a come back now. Be prepared. You never know what may happen.
Were you a kid during the last period of wages rising lock-step with value? I.e., before the 1970s?