Debt-laden Neiman Marcus Group is preparing a bankruptcy-protection filing that could come as soon as this week, according to a person close to the situation.

The Dallas-based luxury retail chain, which has been struggling financially for years, has been pushed to the brink by the coronavirus outbreak, sources said, and could become the first major US department store to fall victim to the perilous economic climate.

Neiman Marcus has hired Berkeley Research Group and Boston Consulting Group, sources said. BCG is charged with looking into three options: sell the business, shrink the chain by half the stores and keep operating, or a total liquidation.

A spokeswoman for BCG on Wednesday confirmed that BCG has been hired by Neiman Marcus, but added in a statement that “we have not been ‘charged with looking into’ the listed options,” and declined to elaborate.

The pandemic has forced the non-essential company to temporarily shut all 43 of its Neiman Marcus locations, roughly two dozen Last Call stores and its two Bergdorf Goodman stores in New York City.

Reuters first reported the news of the imminent filing, noting the company is in the final stages of negotiating a loan with its creditors totaling hundreds of millions of dollars, which would sustain some of its operations during bankruptcy proceedings, according to the sources.

Neiman Marcus’ borrowings total about $4.8 billion, according to credit ratings firm Standard & Poor’s. Some of this debt is the legacy of its $6 billion leveraged buyout in 2013 by its owners, private equity firm Ares Management Corp and Canada Pension Plan Investment Board.

It has also furloughed many of its roughly 14,000 employees — and skipped millions of dollars in debt payments last week, including one that only gave the company a few days to avoid a default, according to Reuters.

Other department store operators that have also had to close their stores are battling to avoid Neiman Marcus’ fate. Macy’s and Nordstrom Inc have been rushing to secure new financing, such as by borrowing against some of their real estate. JC Penney Co is contemplating a bankruptcy filing as a way to rework its unsustainable finances and save money on looming debt payments.

With Reuters