For its second fiscal quarter ended January 28, Neiman's, hurt by poor sales and traffic trends and impairment charges, reported a net loss of $117.1 million, compared with net earnings of $7.9 million for the second quarter of fiscal year 2016.
Neiman Marcus abandoned its plans for an initial public offering in January. In particular, the company also took a $153.8 million impairment charge to write down the value of its Neiman Marcus brand.
A rep for Toronto-based Hudson's Bay declined to comment on the rumored talks to Bloomberg, but said that in general the company would "selectively evaluate opportunities to accelerate the company's strategic growth while maintaining or enhancing its credit profile".
Hudson's Bay is seeking a deal that would not include Neiman's $5 billion debt, the Journal reported, citing people familiar with the matter.
Hudson's Bay is in talks to buy struggling USA luxury retail chain Neiman Marcus, the Wall Street Journal reported on Tuesday, citing unnamed sources. The debt load stems from the $6 billion acquisition of the company by the Canada Pension Plan Investment Board and Ares Management in 2013. Hudson also has had talks about acquiring another struggling retailer, Macy's.
"The company's capital structure is unsustainable over the long term", S&P said.
Neiman Marcus is one of a number of department stores that have run into financial problems in recent years as more and more consumers embrace online shopping.
Comp store revenue decreased by 6.8 percent for the quarter and 7.3 percent for the full six months.
The company, which is based in Dallas, operates 42 Neiman Marcus stores, and owns two Bergdorf Goodman luxury stores in NY and 27 off-price Last Call clearance centers, according to its website.
Neiman Marcus didn't specify which retailers it was looking at. The company has been opening in-store boutiques to let customers rent clothes and accessories.