In a move that’s running counter to the industry trend, Neiman Marcus Group is ramping down its off-price business.
Neiman Marcus said Tuesday that it will close 10 of its Last Call locations, which represent more than 25 percent of its 37-store fleet. The retailer said the closures will better enable it to focus on its mainline business. And they should also benefit Last Call shoppers. With fewer stores to stock, there will be more overstock from Neiman Marcus rather than product produced specifically for this channel.
“This decision is about optimizing our Last Call store portfolio to deliver the best customer service and freeing up resources to support new initiatives for our full-line Neiman Marcus and Bergdorf Goodman channels. We are investing in our strengths as the clear leader of high-end luxury retail,” said Elizabeth Allison, senior vice president, Last Call.
In July, the company mentioned that it was “assessing” the Last Call concept as a part of its overall reorganization plans, which will result in 225 job cuts. The Last Call closures will result in job losses for 241 employees, who will receive severance and consideration for other roles within the Group.
[Read about how other retailers are looking to capitalize on the off-price frenzy: Follow the Leader: Off-Price Gets Crowded]
Neiman Marcus carries a hefty $5 billion debt load, which has seriously limited its options while also forcing it to consider a range of options, including a sale to Canada’s Hudson’s Bay Company. The retailer’s woes have been compounded by the industry-wide apparel retail slump, which has sent consumers in search of experiences and to the web in search of purchases.
The company reported comp sales were down by 4.9% in the third quarter, with single digit declines expected in the fourth quarter. In line with the industry trend, Neiman’s online sales, which are 30 percent of revenue, were up 2.1%.
Going forward, Neiman’s is looking to data analytics and continued strong e-commerce performance to help boost the bottom line.