Direct is bright spot in Neiman Marcus results

Share this content:

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

 

Last month, Nordstrom said its second-quarter 2009 profit fell 27% but met analyst expectations. Meanwhile, Saks Inc. posted its fifth consecutive quarterly loss last month.

 

close

Next Article in Multichannel Marketing

Sign up to our newsletters

Company of the Week

Brightcove is the world's leading video platform. The most innovative and respected brands confidently rely on Brightcove to solve their most demanding communication challenges because of the unmatched performance and flexibility of our platform, our global scale and reliability, and our award-winning service. With thousands of customers and an industry-leading suite of cloud video products, Brightcove enables customers to drive compelling business results.

Find out more here »

Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here

Relive the 2017 Marketing Hall of Femme

Click the image above