Neiman Marcus may be sold
NEW YORK - Luxury retailer Neiman Marcus says it’s exploring strategic alternatives including a sale of the company.
The announcement came as the retailer, which also operates Bergdorf Goodman, reported a loss in its second fiscal quarter that ended Jan. 28 and its sixth consecutive quarterly drop for a key revenue measure.
Neiman Marcus didn’t specify which retailers it was looking at. The Wall Street Journal reported that the company is in discussions with Hudson’s Bay Co. Neiman Marcus didn’t immediately respond when asked for comment, and Hudson’s Bay says it doesn’t comment on rumors.
“We selectively evaluate opportunities to accelerate the company’s strategic growth while maintaining or enhancing its credit profile,” Hudson’s Bay said in a statement.
Neiman Marcus says it has not set up a timetable for completing its evaluation. In January, the retailer abandoned plans for an initial public offering.
The chain known for its lavish holiday catalog was bought by Ares Management LLC and the Canada Pension Plan Investment Board in 2013.
For the second quarter, Neiman Marcus reported revenue of $1.4 billion, down from $1.49 billion, or 6.1 percent, in the year-ago period. It reported a net loss of $117 million, including a non-cash impairment charge of $153.8 million, compared with net earnings of $7.9 million a year ago.
“The high-end brands are losing momentum,” says Marshal Cohen, chief industry analyst at NPD Group Inc., a market research firm. He said the average price for a luxury item dropped 5 percent last year from the prior year.
Neiman Marcus is one of a number of department stores that have run into financial problems in recent years as more and more consumers embrace online shopping. Macy’s (M) announced in January that it would move to eliminate 10,000 jobs and close 68 stores. Sears, which has lost billions in recent years, said late last year it would close 150 stores and sell off its Craftsman brand.
While discount chains are doing brisk business, stores with mid-range price points are grappling with lower foot traffic, higher real estate costs and more consumers shopping online.
“Our customers are increasingly deliberate and thoughtful when they shop,” said Neiman Marcu CEO Karen Katz on Tuesday in a conference call to discuss the company’s latest results. “Customers are making fewer trips to the store and the mall and more trips to the web.”
The strong U.S. dollar is also hurting sales, Katz said, noting that Neiman Marcus has seen a drop in foreign shoppers in cities such as New York, Miami and Las Vegas.
