U.S. Markets closed

$6 billion sale of Neiman Marcus complete

NEW YORK (AP) -- Ares Management and Canadian Pension Plan Investment Board have completed their $6 billion purchase of luxury retailer Neiman Marcus.

The transaction ends control of the luxury retailer by private equity firms TPG Capital and Warburg Pincus. They bought the company for $5.1 billion in 2005 during booming economic times, and just before a global economic crisis.

Neiman Marcus, founded in 1907 by Herbert Marcus Sr., his sister Carrie Marcus, and her husband A.L Neiman, has had a series of owners during its rich history. The company was sold to department store operator Broadway-Hale in 1969 and began planning its national expansion outside of Texas. Through a series of deals, the retailer came under the ownership of the conglomerate Harcourt General, which also published textbooks and owned movie theaters.

In 1999, Harcourt General spun off Neiman Marcus stores and Bergdorf Goodman as a separate, publicly traded entity, the Neiman Marcus Group. In 2005, TPG Capital and Warburg Pincus bought the company for $5.1 billion, taking it private.

Neiman Marcus has a long-held reputation for coddling its wealthy shoppers with customer service that goes above and beyond the standard. In 1984, it established InCircle, the industry's first customer loyalty program, which now has 144,000 members and generated 40 percent of the company's total revenue in the latest fiscal year. Neiman Marcus also expanded its business online in 2000, becoming the first major luxury store to do so. A little more than 20 percent of its revenue comes from online.