The Neiman Marcus Group, Inc. and HSBC-North America’s Retail Services business announced they have entered into a strategic alliance to support and enhance the credit operations of the Company and its subsidiaries.
In connection with this transaction, HSBC Retail Services will purchase the private label credit card accounts and related assets of the Company and its subsidiary Bergdorf Goodman, Inc., as well as the outstanding balances associated with such accounts. The total purchase price is comprised of the face value of the receivables and accumulated accounts receivable collections which is estimated to be approximately $640 million as of the closing date. The purchase price includes approximately $527 million in net cash proceeds and the assumption or repayment of approximately $113 million of the Company’s securitization liabilities. In addition, the Company will receive on-going payments related to credit sales generated under the new agreement.
The Company will continue to handle key customer service functions including new account processing, transaction authorization, billing adjustments, collection services and customer inquiries. The Company and HSBC Retail Services will also enter into a long-term relationship, pursuant to which the Company will continue to receive compensation for certain marketing and servicing activities.
The Neiman Marcus and Bergdorf Goodman portfolio comprises a total of approximately 3 million accounts.
“We are very excited about our new partnership with HSBC,” said Burt Tansky, President and CEO of the Company. “Our customers can expect the same outstanding customer service they have always received from Neiman Marcus and Bergdorf Goodman, while HSBC will provide us with additional operational and marketing capabilities to support our continued growth.”
“Helping our partners grow through enhanced customer relationships is what drives us at HSBC, and we are looking forward to reinforcing and extending the Neiman Marcus and Bergdorf Goodman brands through every aspect of the private label card programs,” said Joseph Hoff, chief executive officer, HSBC Retail Services. “Our marketing, database analytics and CRM expertise, combined with our investments in technology, allow us to support a positive customer experience across all the critical interactions that the Neiman Marcus Group has with its customers.”
This transaction is expected to close by July 31, 2005, subject to customary regulatory review and closing conditions.
The Neiman Marcus Group, Inc. operations include the Specialty Retail Stores segment and the Direct Marketing segment. The Specialty Retail Stores segment consists primarily of Neiman Marcus and Bergdorf Goodman stores. The Direct Marketing segment conducts both print catalog and online operations under the Neiman Marcus, Horchow and Bergdorf Goodman brand names. Information about the Company can be accessed at [www.neimanmarcusgroup.com].
HSBC-North America includes all of HSBC’s U.S. and Canadian businesses, including the former Household businesses, and has more than $300 billion in assets. The company’s businesses in North America serve more than 60 million customers in five key areas: personal financial services, consumer finance, commercial banking, private banking and corporate investment banking and markets. HSBC’s Retail Services business is a leading issuer of private label (merchant branded) credit cards in the United States. It provides customized credit card solutions for the world’s premier retailers and manufacturers and has more than 60 active merchant relationships. Financial products and services are offered under the HSBC, HFC and Beneficial brands. For more information, visit: [www.hsbcusa.com].