Dive Brief:

• Neiman Marcus on Monday said that the process has begun to explore the sale of its online MyTheresa unit, according to a Tuesday filing with the Securities and Exchange Commission.

• In the filing, the department store retailer also said that its third quarter store comps declined year over year some 1.3% to 1.9%, a preliminary report that represents a reversal from recent quarters. The company also expects adjusted earnings for the quarter to be between $119 million to $129 million, down from $143.1 million for the year-ago quarter. 

• Also in the filing, the company announced offers to exchange any and all of its outstanding $960 million of unsecured notes due 2021 and another $655.7 million senior payment-in-kind notes due the same year.

Dive Insight:

In its filing with the SEC, Neiman Marcus led with some good news — noting its investment in resale site Fashionphile earlier this month — and reiterated its commitment to its turnaround even as it detailed some bad news.

"As previously disclosed, in fiscal year 2019 we have been and remain focused on investing in initiatives designed to drive our multi-year transformation plan," according to the filing. "We believe that a number of additional factors also contributed to these expected results, including the impact of publicity surrounding negotiations related to the transactions in connection with the Exchange Offers."

The department store's Manhattan debut at the new Hudson Yards development has been overshadowed by its debt and its difficulties in recapturing customers and sales that have largely abandoned the model in general. Negotiations with creditors have been prolonged. While a proposed deal was struck with creditors last month, one creditor — Marble Ridge — rebuffed it. The hedge fund has an ongoing lawsuit against Neiman Marcus alleging the fraudulent transfer of its MyTheresa e-commerce business last summer.

In fact, Marble Ridge in a statement on Tuesday called the latest plan for MyTheresa "the third step in what Marble Ridge contends is a scheme to place the valuable MyTheresa assets beyond the reach of Neiman's creditors" and slammed "mismanagement" of the company for the poor showing in its latest financial report. "This restructuring —underscored by Neiman's poor financial performance and the pricing of credit default swaps — should place an even bigger sign on Neiman for all stakeholders to see that reads BEWARE," according to a Marble Ridge press release, emphasis theirs. "As we have communicated in the past, 100% of the valuable MyTheresa assets must be returned to Neiman Marcus." Retail Dive reached out to Neiman Marcus for comment. 

Neiman has also lost top talent. Fashion director Ken Downing left last month after nearly three decades there, longtime chief merchant Jim Gold announced his departure in January and Scott Emmons, who led the company's "Innovation Lab," left early in the new year.