Neiman Marcus, the U.S. retailer, on May 7 entered into a restructuring support agreement (RSA) with most of its creditors to undergo a financial overhaul, substantially reducing its debt load and interest payments and supporting continued operations during the Covid-19 pandemic and afterwards.

The deal represents over two-thirds of the its debt. To implement the deal, the company has started Chapter 11 proceedings in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division.

Neiman Marcus has secured debtor-in-possession (DIP) financing of $675 million from creditors to continue operating throughout the proceedings.

The retailer’s chairman and chief executive, Geoffroy van Raemdonck, said that prior to Covid-19, the company was making “solid progress” towards long-term profitable and sustainable growth.

Creditors have also committed to a $750 million exit financing package that would fully refinance the DIP financing and provide additional liquidity.

Neiman Marcus expects to emerge from the bankruptcy procedure in early autumn, having eliminated $4 billion of existing debt. The creditors participating in the RSA will become the majority owners of the company.

The e-commerce unit Mytheresa is not a part of the Chapter 11 proceedings and will continue to operate independently.

The temporary closures of some Neiman Marcus, Bergdorf Goodman, and Last Call stores, have been extended through May 31 and the company will continue to use its e-commerce platforms. Ten stores are open for curbside pickup. On May 4, two other Neiman Marcus stores became open to customers by private appointment.

Previously, on May 4, the American fashion retailer J.Crew filed for Chapter 11 bankruptcy protection. Under the agreement reached with creditors, some $1.65 billion will be converted into equity.