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Another Round of Job Cuts Signals More Bad News at Neiman Marcus

Rivet's 2020 Denim Circularity report takes a deep dive into how the global denim industry is plotting its circular future amidst a worldwide pandemic.

Neiman Marcus

It’s been 10 months since Neiman Marcus laid off 500 employees, or about 3 percent of its workforce, and last week the luxury retailer was forced to further trim its headcount.

Roughly 80 positions were purged Thursday—50 of which were in the Dallas area—as Neiman Marcus continues to combine online and store operations, Dallas News reported.

The layoffs followed a hefty 81 percent decline in profits in the third quarter, as revenues dropped 4.2% to $1.17 billion and comparable store sales slipped by 5 percent. CEO Karen Katz called the quarter “challenging” and attributed the poor performance to a trifecta of complications: the strong dollar, falling foot traffic and decreasing oil prices.

The Dallas-based retailer—which operates 42 of its namesake stores as well as two Bergdorf Goodman locations, 29 Neiman Marcus Last Call clearance centers, 13 Last Call Studios and five Cusp stores—is also weighed down with about $5 billion in debt, as a result of being bought and sold twice in 10 years.

And it could change hands again. Earlier this summer, the New York Post reported that Neiman Marcus was on the prowl for a buyer. But a recent report by labor union United Here concluded that current owner Ares Management, which purchased the company with a partner in 2013 for $6 billion, could be “stuck with an obsolete retail relic” on its hands.

Further financial woes are on the way, thanks to ongoing litigation following a data breach in 2013 that’s already cost the company millions of dollars.

In addition to the job cuts, some longtime executives have left Neiman Marcus over the last year, including Wanda Gierhart, who had held the position of chief marketing officer since 2008, and Ignaz Gorischek, who spent nearly 24 years serving as vice president of store development. The company also lost 15-year veteran Stacie Shirley, formerly senior vice president of finance, as well as Justin O’Shea, fashion director of Neiman Marcus-owned e-tailer My Theresa.

Plans to go public were announced a year ago, but shelved a few months later.

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