Even Neiman Marcus Can’t Escape Department Store Woes

Neiman Marcus reported dim results for both its Q4 and full fiscal year, marking the fourth straight quarter of sales declines for the luxury department store. With holiday season preparation already in full swing, the pressure is on for the retailer (and its competitors).

For its 2016 fiscal year, Neiman Marcus saw:

  • Comparable store sales decrease 4.1%;

  • Total revenues decrease 2.9% to $4.95 billion; and


  • Net losses totaling $406.1 million.

The massive net loss can be attributed largely to non-cash impairment write downs of $466.2 million in Q4. The write downs represent the retailer’s loss in value of some goodwill, trade names and assets such as real estate.

As both a department store and a luxury retailer, Neiman Marcus is saddled with not one but two labels that consumers are shying away from. While department stores are being snubbed for online alternatives and niche and specialty counterparts, luxury demand is falling across the board.

Some luxury brands aiming to bounce back or retain their success have sought to reestablish product exclusivity or end promotional sales. In the case of Coach and Michael Kors, both brands have been fed up with the weak results at department stores, and as such have both taken steps to shrink their presence at such locations.

Can Neiman Adapt To A Fast-Fashion World?

The culture of many luxury brands and even department stores also has turned more to a “see now, buy now” business model as they attempt to adapt to modern consumer demands. Many consumers simply are no longer willing to wait six months for fashion merchandise to hit the store. Neiman Marcus appears to have acknowledged this, with the company making efforts to shorten its supply chain.

“Today, fashion shows are now blogged and broadcast all over the world via social media,” said Karen Katz, Neiman Marcus Group CEO on a conference call with investors. “By the time the merchandise ships many months later, the newness and excitement had worn off and in many cases, the customer has moved on.”

With four straight quarters of sales declines, it’s a far cry from where Neiman Marcus stood financially when it filed for an IPO a little over a year ago. The company had reportedly been interested in procuring a buyer or investor in June after disappointing Q3 results, but no potential buyers have expressed interest in the time since.



Access The Media Kit


Access Our Editorial Calendar

If you are downloading this on behalf of a client, please provide the company name and website information below: