No, we don’t mean that Neiman Marcus is having a big
sale on “some” of their luxury fashion, shoes, or accessories. We are
actually talking about this fine retailer possibly selling “everything”. Yes,
the entire operation. It is also possible that they may be seeking a financial
investment of some sort instead of an outright sale. Who knows, maybe they want
sell at all. Below can help you do your own research on the
matter.
Neiman
Marcus Looking for buyer or investor: (Dallas Biz Journal; June 20, 2016)
“Last week, North Texas' fourth-largest private company by revenue reported
third-quarter fiscal year 2016 sales of $1.17 billion, a 4.2 percent decrease
compared to sales of $1.22 billion during the same period last year. Neiman has
now logged three consecutive quarters of sales dips.” The article also
mentioned, “Neiman announced in October it was delaying its IPO, with reports
that market struggles for other high-end retailers led the company to put off an
offering. At the time, competitors like Tiffany & Co. and Nordstrom Inc.
were down more than 12 percent over the previous three months.”
Neiman
Marcus Looking for a Buyer (New York Post; June 17, 2016) “Embattled luxury
retailer Neiman Marcus is casting around for a buyer, or investor, The
Post has learned. Struggling under a toxic combination of a staggering $5
billion debt load and flagging sales, Chief Executive Karen Katz traveled
recently to China to meet with potential buyers, according to a source familiar
with the situation.”
Why
Neiman Marcus Struggles And Will Not Go Public (Forbes; June 17, 2016) There
are growth vehicles: CUSP, Last Call Studios, and their Internet shopping sites
could all be expanded. I estimate that Internet now generates close to 30% of
total sales. It increased 5% in the quarter. The company has excellent direct
mail communication with customers. That means that foot traffic in stores has
slowed at the same time more basic merchandise is bought by loyal customers
through the e-commerce sites.
Neiman
Marcus Revenue Decline (The Wall Street Journal; June 14, 2016): “Neiman
Marcus Group Ltd.’s profit fell 81% on lower sales in the latest quarter as the
luxury department store operator joined a long list of retailers reporting weak
results.”
The following is some information that was on the Neiman
Marcus press release from June 14, 2016 titled Neiman Marcus Group Ltd. LLC
Reports Third Quarter Sales Results.
“Neiman Marcus Group LTD LLC today reported financial results
for its third fiscal quarter ended April 30, 2016. For the third quarter, the
Company reported total revenues of $1.17 billion, representing a decrease of
4.2% compared to total revenues of $1.22 billion for the third quarter of fiscal
year 2015. During this same period, comparable revenues decreased 5.0% and the
Company reported net earnings of $3.8 million compared to net earnings of $19.8
million for the third quarter of fiscal year 2015. Adjusted EBITDA, which is
described on page 7 of this release, for the third quarter of fiscal year 2016
was $173.2 million compared to $202.6 million in the prior year.
On a year-to-date basis, the Company reported total revenues
of $3.82 billion, representing a decrease of 2.7% compared to total revenues of
$3.93 billion in the prior year. During this same period, comparable revenues
decreased 4.2% and the Company reported net earnings of $1.1 million compared to
net earnings of $47.8 million in the prior year. Year-to-date Adjusted EBITDA
was $520.4 million compared to $602.7 million in the prior year.”
Clearly revenue is down, but is this much worse than other
fashion retailers? Well, we also need to consider, “do the other retailers have
the same sort of debt load?”
OK, above is the all fine and dandy, but let’s take a break
from learning about the financial aspects of fashion retailing and do something
way more fun. Let’s all head over to Neiman Marcus to do some shopping. That
is way more exciting than reading. Support the apparel industry by shopping for
clothing at every chance you get.
