Neiman’s Holiday Sales Down, but Up Slightly From Fall
● At the ICR Conference, CEO Geoffroy van Raemdonck detailed how NMG managed through a holiday season that was particularly challenging for the luxury sector.
Though its holiday sales were down low-single digits from a year ago, Neiman Marcus Group was nevertheless pleased with the outcome given the “volatile” luxury market, hesitant shoppers and the promotionally charged retail sector impacting margins.
That assessment came from Geoffroy van Raemdonck, NMG's chief executive officer, who spoke at the ICR Conference in Orlando, Fla., on Tuesday.
“Early indicators suggest that our overall holiday fiscal 2024 comparable sales trend was down low-single digits to last year, while store comparable sales trends held flat to the prior year as we leaned into our relationship business model in order to drive sales despite operating in the volatile luxury retail environment. We are pleased with this holiday fiscal 2024 momentum, which shows sequential improvement from the fiscal [first-quarter] comparable sales results of negative 8 percent compared to the prior-year period,” van Raemdonck told the crowd of investors.
“We saw growth in spend in our top customers and brands as well as comparative strength in our luxury categories of jewelry, designer handbags and ladies' shoes, as well as beauty,” the CEO added. “While we are comfortable with our inventory position currently, we are competing in a retail environment that continues to be highly promotional and continues to impact our gross margins.”
Van Raemdonck did not provide a specific percent change or dollar amount on holiday sales, other than giving the low single digit range.
NMG's fiscal first quarter concluded on Oct. 28. Adjusted earnings before interest, taxes, depreciation and amortization eased to $95 million in the latest three-month period, versus $112 million in the prior-year period, the company previously disclosed to WWD. The luxury retailer, operator of Neiman Marcus and Bergdorf Goodman stores and e-commerce websites, also reported $948 million in sales for its last fiscal quarter, compared to $1.034 billion in the prior year.
“There is slowdown compared to last year but we continue to have a very profitable business, with a double-digit EBITDA rate,” van Raemdonck told WWD.
At ICR, van Raemdonck said that NMG held more than 1,000 experiences during the last holiday season to drive traffic to the stores — and sales. “Our teams remained agile and focused, leveraging customer insights and real-time data to take targeted actions to drive sales at the individual store and category level, while our 3,300-plus sales associates provided personalized, relationship-based service. We are encouraged by the overall improvement in top-line trends coming out of the fall season as we continue to be responsive to the macro environment,” van Raemdonck said.
Neiman's, along with other luxury players, appears to have underperformed the retail industry overall, which according to Mastercard and various industry experts, saw a 2 to 3 percent sales lift during the holiday. Consumers have slowed their spending on discretionary items in favor of spending on nondiscretionary categories, and experiences such as travel and dining out.
Looking ahead, van Raemdonck said the company is “well-positioned to revolutionize luxury experiences in the long term,” and he cited three notable post-pandemic changes in the business: financial flexibility, investments in experiences and building relationships with brands and customers.
“In this consumer backdrop, we are leaning into strategies that focus our investments on customers that seek the most desirable luxury brands. Our goal is to drive high customer lifetime value.”
Though brands of all kinds have been opening their own stores and growing their e-commerce businesses, van Raemdonck made a point of saying that “NMG has longstanding relationships with our desirable luxury brands — and we will continue to be a unique and valuable retail partner. We uniquely offer our luxury brand partners the ability to drive growth, access to a customer who is normally out of reach, support to migrate to new categories, consumer insights that allow brands to better engage their target customer.
“We prioritize both in-store and remote selling, because we have seen that customers who shop in store and online, and also interact or have an ongoing relationship with a sales associate, spend 12 times more than other shoppers.”
During the holiday season, NMG held more than 1,000 events at stores including “Breakfast With Santa,” “Bejeweled
Ball,” “White Elephant” parties, trunk shows and gift personalization moments. Bergdorf Goodman wrapped close to 75,000 gifts using more than 42 miles of purple ribbon and sold more than 500 ornaments every day.