Neiman Marcus Sold For $6 Billion

Luxury retail chain Neiman Marcus was sold today for $6 billion.

According to USA Today, the company has been owned by private equity firms TPG Capital and Warburg Pincus since 2005 when they purchased the company for $5.1 billion. The firms were planning to sell shares to the public as part of an IPO but opted to sell Neiman Marcus for $6 billion today to Ares Management and the Canadian Pension Plan Investment Board.

Mark Cohen, a marketing professor at Columbia Business School, said: “This is a big win for them relative to an IPO.. I think they were itching to get out. They would have exited sooner if not for the onset of the recession.”

The luxury market took a hit during the recession but business is starting to bounce back. Andre Bourbonnais, senior vice president of private investments at CPPIB, said that it was the perfect time to buy a company like Neiman Marcus because people are starting to get comfortable with their money again.

Bourbonnais said: “If you look at where we are in the cycle, it’s a good time to buy this business… People feel more and more confident about the recovery in the U.S. and the sustainability of that recovery.”

It’s unclear if Ares plans to put the company back on the stock market but David Kaplan, a senior partner with the private equity group, said that he plans to position Neiman Marcus as the longtime leader in luxury sales.

Kaplan said: “We plan on investing meaningful capital into the business to ensure Neiman’s long-term position as the unparalleled leader in luxury retail.”

Yahoo Finance reports that the deal should be finalized in the fourth quarter.