Direct is bright spot in Neiman Marcus results
The fiscal fourth-quarter and year-end revenue decreases reported by Neiman Marcus on September 9 reflect a difficult year for luxury merchants, as consumers closely watched their spending. The company's leader, however, cited its Internet business as a bright spot.
For the fiscal fourth quarter that ended August 1, Neiman Marcus reported that year-over-year comparable revenues decreased 23.4%. The decline was 18% for the merchant's direct business, 14% for the Internet alone and 30% for catalogs. Fourth-quarter revenues totaled $768 million, compared to $1.03 billion for the previous fiscal year. Comparable revenues for the year were also down more than 21%.
“Our direct business has held up better than our full-line stores, with the decline in direct roughly half of the decrease in specialty retail sales,” said Burton Tansky, the company's chairman and CEO, during a conference call with analysts.
The Internet business, in particular, “has held up much better and has produced encouraging results even during this difficult period," he continued.
Tansky attributed the relatively strong performance by the merchant's e-commerce site to the diversity of its direct customer.
“Basically, everybody in the US that has a computer is a customer,” he said. “[The Neiman Marcus Web site] has more strength at the middle price range than the stores do.”
Tansky added that Neiman Marcus is looking to the Internet to help improve the performance of its catalog business.
“We still believe there is a strong link between [the catalog and Internet] channels, and therefore remain committed to both,” he said. “We are deepening our understanding of the relationship between the catalog and the Internet and how our customers use both of them.”
Tansky added that Neiman Marcus is confident the luxury consumer “still wants the brands we sell, but will be more discriminating as to value.” Therefore, the retailer is introducing more mid-price merchandise options while remaining committed to the upper range.
Neiman Marcus recently hired Wanda Gierhart as CMO. She is overseeing the retailer's newly integrated marketing, advertising and production for all divisions and brands. Previously, these functions were handled by separate organizations for the stores and for direct.
These moves come amidst a reduction in expenses for the year that totaled approximately $100 million. It cut 375 jobs in January