More bad news for Neiman Marcus

Investors, including CPP , want to exit

U. S. luxury fashion retailer Neiman Marcus Group Ltd. LLC swung to a quarterly loss from a profit a year ago and reported its first drop in same- store sales in six years, the latest blip in the company’s road map to going public again.

The strong U. S. dollar reduced international tourist traffic at the retailer’s stores in South Florida, New York City, Las Vegas and other key markets, chief executive Karen Katz said in a postearnings conference call.

Neiman Marcus, owned by private- equity firm Ares Management LP and the Canada Pension Plan Investment Board, reported a net loss of US$ 10.5 million for the first quarter ended Oct. 31, compared with net income of US$196,000 last year.

Total revenue fell 1.8 per cent to US$1.16 billion. Samestore sales declined 5.6 per cent, the first fall after 23 quarters of rising sales.

Neiman Marcus had in August filed for an initial public offering. In October the IPO was pushed back to 2016 due to volatile stock markets.

“The financials don’t look promising,” Francis Gaskins, president of research firm IPO Desktop, said.

But Gaskins said the results should not scupper Neiman Marcus’s IPO plans as the company’s private- equity sponsors want to exit the company, which is loaded with debt.

The Dallas- based company said total inventory at the end of the quarter was up five per cent.

The company was aggressively managing orders, but it would be a “several-quarter process” to correct its inventory, chief financial officer Donald Grimes said.

Neiman Marcus also saw a drop in profit in the fourth quarter. In addition, its website suffered an outage on the crucial Black Friday recently, leaving shoppers empty-handed.