Neiman Marcus Mulling Sale of Company

Neiman Marcus Group Inc. (NMGA) said Wednesday it is weighing a sale of the company, sending shares of the luxury department store operator up as much as 16 percent to a record high.

The Dallas-based company, which hired Goldman Sachs & Co. (GS) as its financial adviser, said there was no assurance the process would result in any specific transaction.

Neiman Marcus, operator of its namesake stores and more specialized Bergdorf Goodman chain, is the latest department store chain to look for a buyer in the quickly consolidating retail industry. Last month Federated Department Stores Inc. (FD) agreed to buy rival May Department Stores Co. (MAY).

Saks Inc. has been considering the separation of its upscale department stores from its traditional or moderate department store division, according to retail investment bankers.

The New York Post said Neiman Marcus has approached several big retailers, including Limited Brands Inc. (LTD), about buying the retailer for as much as $5 billion.

That would mark a 22 percent premium over the company's market capitalization of about $4.1 billion, based on a share price of $82.25 in midday trade on Wednesday and on 49.45 million weighted averaged common shares outstanding as of Jan. 29.

Neiman Marcus also sought interest from private equity firms Apollo Advisors, Bain Capital, Thomas H. Lee Partners and Kohlberg Kravis Roberts & Co. about a deal to take the retailer private, the newspaper said.

The move by Neiman Marcus follows the purchase of luxury retailer Barneys New York by Jones Apparel Group Inc. for $400 million.

Neiman Marcus publishes the over-the-top Christmas Book gift catalog, selling extravagant luxury items like a jewel-encrusted version of Mr. Potato Head, "His and Hers" robots, and Bombardier Learjets.

In addition to its stores, the company operates catalogs and online operations under the Neiman Marcus and Bergdorf Goodman and under the Horchow brand.

Neiman Marcus has had six straight quarters of double-digit sales increases at stores open more than a year, with profit for in its second quarter ended Jan. 29 up on fewer markdowns, cost controls and better inventory management.

Revenue in the quarter rose to $1.13 billion from $1.05 billion.

Class A shares of Neiman Marcus were up $7.50. or 10 percent, at $82.25 on the New York Stock Exchange after hitting a record high of $87.75 earlier.