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BFD Expert Voices - Retail Deals

BFD Expert Voices

Neiman Marcus has made a number of investments in expanding its supply chain, renovating its stores, launching a new app, and most recently new hybrid workspaces, its CEO Geoffroy van Raemdonck tells Richard.

Why it matters: The Dallas-based luxury retailer has invested $300 million in such efforts since 2021, a sign its investors remain committed to overhauling the business, he says.

Details: Neiman Marcus recently opened a new workspace in Dallas for hybrid workers as part of its remote-first approach following the pandemic, van Raemdonck says.

It refers to the offices, which includes locations in New York City and Bangalore, as corporate hubs — a work style intended to emulate the company's omnichannel approach to retail, he says.

Be smart: The switch to corporate hubs has cut corporate office expenses by 30%, showing how such moves can impact the bottom line, van Raemdonck says.

Neiman Marcus' remote-first approach to work has led to a 34% increase in employee net promoter score (eNPS) since January 2020 and a 20% reduction in time to hire, it says.

Zoom in: Prior to the pandemic, Neiman Marcus polled its workers and found they wanted better work and life balance, so it decided to allow them not to be in the office and to work in different places, van Raemdonck says.

That shift was accelerated by the pandemic.

Of note: van Raemdonck is relocating from Dallas to New York City this summer to be closer to the press, fashion industry and brands, he says.

Plus: Neiman Marcus is also building out its supply chain and fulfillment network by expanding its operations in Pinnacle Park and adding a new distribution center on the East Coast for both Neiman Marcus and Bergdorf Goodman.

The Neiman Marcus mobile app, meanwhile, adds combines e-commerce with digital styling and remote selling tools.

1 big thing: Neiman Marcus reinvests in business, unveils hybrid workspaces

Neiman Marcus' new workspace in Dallas for hybrid work. 

Neiman Marcus' new workspace in Dallas for hybrid work. Photo: Courtesy of Neiman Marcus

Private equity firms are weighing offers for Worldpay, a merchant payments provider owned by Fidelity National Information Services (FIS), per multiple reports.

Why it's the BFD: It's a blow to FIS, which took a $17.6 billion write-down on Worldpay earlier this year after acquiring it in 2019 for about $43 billion, Richard writes.

Details: PE firm GTCR has been widely reported as the most likely buyer and could end up shelling out between $15 billion and $20 billion, per Bloomberg and Reuters.

Advent International, another PE firm, was also mentioned as a possible bidder.

Catch up fast: FIS announced plans to spin off Worldpay in February after acquiring it in 2019 for $43 billion.

The move was the result of a strategic review, which was pushed by activist investor DE Shaw last year, per reports.

The intrigue: Large Wall Street lenders have discussed providing financing for the deal, per the FT, which would herald a change in atmosphere when it comes to funding big buyouts.

The bottom line: If a deal gets done, it "would be one of the largest carve-outs ever," per the Financial Times, which was the first to report the latest update on the process.

FIS and GTCR did not immediately respond to requests for comment. Advent declined to comment. 

2. The BFD: PE firms circle FIS unit Worldpay

Illustration of a hand cursor holding hundred dollar bills.

Mars, whose product portfolio ranges from Snickers candy bars to Whiskas cat food, has agreed to acquire Kevin's Natural Foods, it announced today.

Why it matters: Despite an opening in the IPO market, the company ultimately chose a sale.

Flashback: Axios reported in January that the company was weighing an exit and noted its relationship with investment bank Wells Fargo, which served as sell-side adviser on the deal.

Details: The transaction values the business at $800 million, per Reuters, though a Mars spokesperson declined to comment.

The deal resulted from a competitive auction process, a source familiar tells Axios.

Kevin's co-founder, Kevin McCray, previously said that the company expected to generate $190 million in revenue this year.

Last year the company had $140 million in sales, while in 2021 it had $100 million, in 2020 it had $45 million, and in 2019 it had only $8 million.

Catch up fast: In late 2021, Kevin's announced a minority investment by PE firms TowerBrook Capital Partners and NewRoad Capital Partners.

That investment funded expanded production capacity to meet the company's growth trajectory until it reaches $500 million in revenue, a figure it projects it will hit by 2025.

What they're saying: Mars acquired Kevin's to begin to build a presence in healthier foods and in the refrigerated section of grocery, a Mars spokesperson said.

In that vein, the company plans to make more acquisitions near term, also per Reuters.

3. Mars to acquire Kevin's Natural Foods for $800M

👶 The auction for BuyBuy Baby has drawn several suitors, with Dream On Me Industries (one of the company's vendors) offering what could be the winning bid.

Dream On Me, which manufactures baby gear, was the successful bidder per documents filed with the bankruptcy court. 

Everyday Health Media is the runner-up. An auction for the rest of BuyBuy Baby’s assets is scheduled for July 7 and could yield an offer on the IP that tops Dream On Me’s bid, which was not disclosed.

4. Retail therapy

Illustration of a therapy couch with a pillow made of money.

• Paine Schwartz Partners offered to buy Australian produce grower Costa Group (ASX: CGC) for A$1.63b. https://axios.link/3pr0Z2d

• Claire's, a Hoffman Estates, Ill.-based girl's fashion jewelry retailer, withdrew IPO registration it filed in September 2021. Backers include Elliott Management, Monarch Alternative Capital, Goldman Sachs and JPMorgan Chase. https://axios.link/46x0sMK

• L Catterton sold Italian bicycle brand Pinarello to an undisclosed family office. https://axios.link/3pA2wTr

5. Retail transactions

• Gerry Murphy, Burberry’s chair, has been named Tesco’s chair, effective Sept. 1. He will step down as chair of Tate & Lyle on the same date. https://axios.link/44clz5w

• Avery Baker, president and chief brand officer of apparel giant Tommy Hilfiger, has resigned. https://axios.link/3PHIlO0

• Matthew Scanlan, CEO of cashmere brand Something Navy, is exiting the company. https://axios.link/44w2Ilr

• ​​Alessandro Corsi, CFO of footwear company Salvatore Ferragamo, resigned and will exit the company on Sept. 30. https://axios.link/43kAl96

• Sean Tresvant was appointed CEO of Yum Brands-owned franchise Taco Bell, succeeding Mark King, who is retiring. https://axios.link/3NECYN9

• John Persons was promoted to COO of Northeast Grocery, the parent company of Price Chopper/Market 32 and Tops Friendly Markets. Ron Ferri will succeed Persons as Tops’ president. Mike Miller was named chief administrative officer of NGI. https://axios.link/46B5Wpx

6. It's Personnel

Welcome back, Retail readers. Happy Wednesday.

Situational awareness: Jenny Craig will be revived for e-commerce by the owner of the weight-loss meal provider Nutrisystem, per CNBC.

📺 What we're watching: Richard watched the first installment of the latest season of "The Witcher" on Netflix and the stunning conclusion to Apple TV+ sci-fi series "Silo."

✏️ Big thanks to newsletter editor Claire Rychlewski and copy editor Mickey Meece for today's edits.

July 05, 2023

1 big thing: Neiman Marcus reinvests in business, unveils hybrid workspaces