NEW YORK • Neiman Marcus Group is stepping up preparations to seek bankruptcy protection after the coronavirus crisis forced the debt-laden US luxury department-store chain to shut its stores, people familiar with the matter said on Thursday.

Neiman began confidential talks this week with bond holders about possible financing that would help it continue operating while under bankruptcy protection, the sources said. It has also started similar talks recently with its lenders, one added.

Up until this week, Neiman had received inquiries from creditors about its next moves but had not started discussions about a possible bankruptcy, some of the sources noted. They said creditors could give Neiman more time to make upcoming debt payments while talks continue, which could result in a deal to rework obligations outside of bankruptcy proceedings.

Neiman declined to comment. Last month, it said it was "evaluating all courses of action to preserve our financial strength" because of the pandemic. It reached a deal last year with creditors to rework debt and avoid a bankruptcy filing. But the virus outbreak forced the closure of all the Neiman, Bergdorf Goodman and Last Call stores it operates to end-April, and the furlough of most of its 14,000 staff.

The closures have resulted in a cash crunch just before significant interest payments on portions of its over-US$4 billion (S$5.7 billion) of debt are due starting April 15.

REUTERS