Neiman Marcus puts itself up for sale

Tribune News Service
Special to Emirates Business

A jewel and luxury fashion industry leader for more than 110 years is once again looking for a suitor.
After reporting its sixth consecutive quarter of sales declines, Dallas-based Neiman Marcus said that it’s exploring all options, including a sale of the company. A sale has been rumored for some time.
Saddled with debt from two leveraged buyouts since 2005 and a consumer that’s shifted her buying habits, the company hired investment banking firm Lazard Ltd. earlier this month.
The Dallas-based retailer said it’s “undertaking a process to explore and evaluate potential strategic alternatives, which may include the sale of the company or other assets, or other initiatives to optimize its capital structure, as well as a number of other alternatives.”
There’s no timetable for evaluating its options, the company said.
Neiman Marcus has been bought and sold more times than most companies, even one as old as it is. It’s an example of how private equity deals don’t always work out, particularly in retailing, which is undergoing a big disruption as online shopping operations and shipping costs have added to the expenses of traditional brick-and-mortar stores. Neiman Marcus hasn’t been a laggard in the online space. Online sales represented 31 percent of total revenue in the holiday quarter.
During a conference call on Tuesday morning, CEO Karen Katz said while Neiman Marcus remains at the forefront of luxury shopping, people are shopping less. She also said Texas stores, which had been lagging behind with lower oil prices, are doing better.
“Customers are making fewer trips to the store and the mall and more trips to the web. They want newness, exclusivity and the best price,” Katz said. “Driven by these expectations, and thanks to the information available to them on the web, more and more we are seeing our customers shop multiple stores or websites not just ours.”
Also, ongoing problems with new systems, which included inventory tracking, resulted in some sales losses in the last six months, she said. Problems kept inventory from going to the right stores and miscounted items. That lack of transparency caused problems with its ability to pay vendors in a timely manner, Katz said. But she said the challenging implementation will start to yield benefits this year.
Katz, who has been with Neiman Marcus for more than 30 years, didn’t take questions from analysts and didn’t say whether the company has potential buyers. In the past, the name that’s come up the most is Canada-based Hudson’s Bay Co., which bought Saks Fifth Avenue in 2013. Earlier this year, the Wall Street Journal reported that Hudson’s Bay had also approached Macy’s about a potential takeover.