Brookfield Asset Management recently announced it will launch the Retail Revitalization Program. The $5 billion program’s goal is to deliver much-needed capital and help recapitalize retail businesses—including the ones that operate in the same major markets as Brookfield does. Brookfield and its institutional partners will fund the program, which will focus on non-control investments in retail business to help with their capital needed during the COVID-19 crisis.
The Retail Revitalization Program will focus on retail businesses that have $250 million or greater in normalized revenues and have been operating for at least two years.
Brookfield’s Private Equity Group Managing Partner and Vice Chairman Ron Bloom will lead the Retail Revitalization Program. Bloom played a key role in restructuring and rejuvenating the automobile industry on the U.S. government’s behalf during the 2008 financial crisis.
“This initiative is being designed to assist medium sized enterprises in getting back on their feet,” Bloom said in a statement. “We believe this is a critical component to getting the economy moving again, and we would like to partner with companies and entrepreneurs that can draw on our capital and expertise to stabilize and grow their business.”
Additionally, Brookfield plans to make its resources and real estate and private equity expertise available, as it focuses on supporting long-term business performance.
“We look forward to contributing capital and expertise to support the retail sector through this time and position businesses for long-term success,” Bloom said.
Neiman Marcus files for Chapter 11 protection
Luxury retail chain Neiman Marcus could perhaps be beneficiary of Brookfield’s Retail Revitalization Program. The retailer recently filed for Chapter 11 protection amid temporary store closings and carrying buyout-fueled debt, according to Pitchbook.
Neiman Marcus currently has set up a restructuring agreement with its lenders that would relieve it of approximately $4 billion in debt. The deal would also provide $675 million debtor-in-possession financing and $750 to help support operations. The company is looking to come out of this process in fall and give control to its lenders. Meanwhile, Mytheresa, Neiman Marcus’ online retail business would operate independently.
“We had a business that was on track prior to COVID-19,” Neiman Marcus Chief Executive Geoffroy van Raemdonck said in an interview. “Everything was going well in our transformation, but we had massive interest payments. COVID threw everything off track. This is an opportunity to reset our financial structure.”