The Beverly Hills flagship store of luxury retailer Neiman Marcus has been sold to a New York investor as the department store chain's owners sell properties to pay off debts.
Neiman Marcus, which has occupied the 9700 Wilshire Boulevard store since it opened in 1979, will continue to serve customers there as a tenant.
“We made the strategic decision to sell the land beneath the Neiman Marcus Beverly Hills store and sign a long-term lease with the new owner,” a Saks Global spokesperson said. “This opportunistic real estate transaction does not impact our daily operations. We remain committed to serving our loyal Beverly Hills customers.”
Saks Global, the parent company of Saks Fifth Avenue, Neiman Marcus, Saks Off 5th and Bergdorf Goodman, sold the Neiman Marcus building in Beverly Hills for an undisclosed price.
The new owner of the marble-clad property on the edge of the city's prestigious Golden Triangle is Ashkenazy Acquisition Corp., a private real estate investment firm owned by Ben Ashkenazy.
Ashkenazy also owns the former Barneys building on Wilshire Boulevard, which is now occupied by Saks Fifth Avenue.
“This strategic acquisition significantly expands Ashkenazy's presence in Beverly Hills and reinforces the firm's focus on irreplaceable, world-class retail assets located in globally recognized luxury corridors,” the company said in a statement.
Saks Global executives have signaled plans to shore up cash by selling stores or raising emergency financing.
It may also divest a stake in luxury retail chain Bergdorf Goodman to help pay down debt and reinvest in its core retail business, real estate data provider CoStar said.
The company faces a $100 million debt payment deadline at the end of December and is considering filing for Chapter 11 bankruptcy as a last resort, Bloomberg said. The fight comes a year after Saks Global bought Neiman Marcus in a $2.7 billion deal.
Beverly Hills' retail real estate market remains one of the strongest in the country, said real estate broker Jay Luchs of Newmark. He was not involved in the sale of Neiman Marcus properties, but has negotiated sales and leases of luxury stores in Southern California for more than two decades.
“This is probably the best it's ever been in Beverly Hills,” he said, with “basically nothing available” on Rodeo Drive for merchants looking for retail space and demand increasing on nearby streets like Wilshire Boulevard.
Some high-end brands are expanding their stores, and luxury brands, including LVMH, Chanel, Hermes and Richemont, are buying their stores rather than renting them, he said.
“They don't do that unless they're making a huge amount of money, unless they want to be there forever,” Luchs said, “and they realize that Los Angeles and Beverly Hills are a very important market for them.”
