Yesterday, Neiman Marcus was sold to the Canadian Pension Plan (CPP) Investment Board and American private equity partner Ares Management LLC (they acquired majority ownership of Neiman's for about $6 billion). Despite new Canadian ownership, we don't expect Neiman Marcus to open in Canada unless it takes over Holt Renfrew's store locations.
CCP's purchase of Neiman Marcus makes for a substantial number of international department stores owned either wholly or partly by Canadian companies. Well, sort of. Selfridges Group, owned by Canada's Weston Family, owns Holt Renfrew and Ogilvy as well as Selfridges in England, Brown Thomas in Ireland and de Bejenkorf in the Netherlands. The Hudson's Bay Company (Canadian, but now mostly American owned) recently bought Saks Fifth Avenue, and it already owns American retailer Lord & Taylor.
Dallas-based Neiman Marcus has over 40 full-line American stores, including several productive flagships (some over 200,000 square feet) and New York City's iconic Bergdorf Goodman store.
The only way we think Neiman Marcus would even consider opening in Canada is if it were to buy Holt Renfrew's Canadian store locations. Holt's largest stores are about the same size as Neiman Marcus stores. Even if Neiman's bought Holt's, Neiman's would face a disadvantage to Saks - Saks will initially pay no rent for its Canadian store locations as they will be located within Hudson's Bay-owned real estate. Holt Renfrew rents most of its store space.
If Neimans took Holt's stores, we think it would only want the following six Holt Renfrew locations: Vancouver, Calgary, Toronto (Bloor Street, Yorkdale Shopping Centre and Square One in Mississauga), and Montreal. Holt Renfrew's Edmonton, Ottawa and Quebec City stores are too small for Neiman Marcus, and it would be too expensive and complicated to expand these to a Neiman Marcus-sized 100,000-125,000+ square feet.
This isn't the first time in recent history that upscale American department stores have been owned by Canadians. In the mid 1980's, Robert Campeau took control of Federated Department Stores and Allied Department Stores, including Bloomingdale's. However, Campeau was responsible for their subsequent bankrupcy.
[Neiman Marcus website]