The bumpy road continues for Neiman Marcus Group Ltd. LLC.
After posting a headline-making 80 percent tumble in profit in Q3, the Dallas-based retailer followed it up with sluggish fourth quarter and full-year results.
Neiman Marcus said Friday that its Q4 revenues declined 3.3 percent, to $1.13 billion, while comparable sales decreased 4.1 percent. Meanwhile, the company’s net losses ballooned, to $407 million, compared with net losses of $32.9 million in Q4 of the prior year.
Neiman Marcus president, CEO and director Karen Katz blamed a confluence of factors for the luxury department store chain’s troubles — including persistently low oil prices, which continues to hinder spending for the stores’ high-end clientele whose pocketbooks are attached to the Texas energy industry.
“World events including acts of terrorism, the relative strength of the U.S. dollar versus other world currencies, and the persistently low price of oil all exerted pressure on our performance,” Katz said during the firm’s conference call. “We experienced firsthand that a strong dollar keeps tourists away and negatively impacts the spending of those who do continue to travel. We experienced the impact of the strong U.S. dollar in key tourism markets of South Florida, New York City, Los Vegas and Hawaii.”
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Katz also noted that shifts in consumer spending patterns have birthed an ongoing challenge for the company.
“Across the retailing sector, we’ve also been challenged by industry evolution in other areas, omnichannel, transformation of the shopping experience, store of the future, promotion overload, buy-now, wear-now,” she added.
For many retailers, a major takeaway from the most recent New York Fashion Week is the reality of the see-now, buy-now movement. Katz noted that new pressures to keep up with an evolving fashion cycles has also yielded problems.
“Until a few years ago, only retailers in the fashion media attended the major fashion shows, access was exclusive,” Katz said. “Today, fashion shows are now blogged and broadcast all over the world via social media. At the time, the merchandize ships many months later, the newness and excitement at one-off and in many cases the customer has moved on.”
Fueling the problem, Katz added, is “an entirely new class of fast fashion retailers.”
“This business model is to bring the trends to market in a relatively short amount of time, which means that many customers have already bought and won the trends by the time the authentic runway looks are delivered to stores,” the CEO said.
While Katz listed a few ideas to spur better earnings outcomes — including ramping up omnichannel and remodeling a few stores — the tough quarter has refueled speculation that the company could be up for sale in the near future.
For the full year, Neiman Marcus reported total revenues of $4.95 billion, a 3 percent year-over-year decline. Comparable sales also declined 4.1 percent. The company reported a net loss of $406.1 million, compared to net earnings of $14.9 million in the prior year.
