Neiman Marcus CEO says a more normal social and travel calendar will help the luxury retailer
When customers return to their social life, Neiman Marcus believes that it has a tailwind during the holiday season from higher sales to build on.
Men’s clothing, women’s shoes, handbags and jewelry were the top-selling categories, resulting in a 6% increase in sales for the fourth fiscal quarter ended July 30, compared to the same quarter of 2019, said Neiman Marcus CEO Geoffroy van Raemdonck.
“The social calendar is no longer where it was, and that’s why women’s clothing is still not where it was before,” said van Raemdock. “The lifestyle is still restricted, but we continue to get along well with our loyal customers and have increased the number of new customers.”
The Dallas-based company privately reported its latest results to its owners and corporate debtors Tuesday and shared some of that financial data with The Dallas Morning News. It declined to disclose total sales and actual dollar results.
“We assume that the social calendar and the travel calendar will really boost demand this Christmas season,” said van Raemdonck, noting that many people “haven’t had the opportunity to really give away and shop for almost two years”.
Luxury and much of the retail sector is seizing 2019 as the year to beat as the pandemic temporarily closed stores and canceled events that drive fashion spending.
Van Raemdonck said that while most of Neiman Marcus’ goods come from Europe, the company has a number of contingency plans in case more disruptions in the supply chain arise and the labor shortage for seasonal workers worsens.
“What we learned during the pandemic is that this organization is very resilient and can move very quickly,” he said. “That is why we look to the holidays with great confidence.”
The sharp rise in sales in the spring-summer quarter was due to a 21% drop in inventory, allowing the retailer to sell its goods at full price. Van Raemdonck said this resulted in “a very strong quarter for us” with a profit margin of 10% on sales for the quarter, above pre-COVID levels.
The big major European brands like Christian Louboutin, Saint Laurent, Brunello Cucinelli and Dior continue to drive results.
The retailer’s top 20 brands made a significant contribution to the improved financial data, increasing 50% from pre-pandemic levels, he said. “Everything we sold was at a higher price.”
The new customer is being watched closely, he said. Many of them had higher disposable incomes during the pandemic because they didn’t socialize or commute to work.
New customers come back more often: 1 in 5 new customers come back within 3 months, an improvement over 1 in 6 before the pandemic.
“We chase them and then if we win them they buy full price and they come back quicker,” he said. ”
Neiman Marcus is serious about being the luxury leader, he said, noting that the company ceased its last call operations last year, with few locations operating as real check-in centers rather than a separate off-price brand to have.
According to Bain & Co, “roaring twenties” could reshape the US luxury market. The company’s annual forecast released in May predicted a recovery in the US based on an improved economy, buoyant stock market, rising consumer confidence, and rapid adoption of vaccines.
Globally, Bain predicted that the global market for personal luxury goods will be 5% larger in 2021 than in 2019.
Twitter: @MariaHalkias
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