Will others follow Neiman Marcus’ return to a full-price focus?
Neiman Marcus recently announced its intention to close more than 25 percent of its Last Call off-price outlets. The retailer has expressed hopes to reestablish itself as a leader in the full-price and luxury markets by narrowing its off-price offerings with the shuttering of 10 of 37 Last Call locations.
“This decision is about optimizing our Last Call store portfolio to deliver the best customer service and freeing up resources to support new initiatives for our full-line Neiman Marcus and Bergdorf Goodman channels,” Elizabeth Allision, senior vice president for Last Call, told USA Today.
Many believe it’s high time for Neiman Marcus to make a bold move. With six quarters of declining comparable sales and $5 billion in debt, it should come as no shock that the company feels it should start doing things differently.
Neiman Marcus is not the first high end department store to return to a luxury-focused business model after a brief foray into the off-price sector. Barneys New York led the pack in off-price store closures earlier this year. Barneys’ spokespeople said the company intended to focus on its classically successful business model by selling high-ticket items to an upscale clientele.
As Barneys incoming CEO, Danielle Vitale, told Fortune, “If it’s exclusive and rare and doesn’t exist anywhere else, we are not forced to mark it down.”
With Barneys and Neiman Marcus following in the footsteps of such luxury brands as Ralph Lauren and Coach by returning to full-price models, the New York Post recently questioned whether off-price stores are losing some of their appeal. The article pointed out that even Nordstrom’s successful Rack chain had seen its same-store sales increase slow from 4.6 percent in the first quarter of 2016 to 2.3 percent this year.
- Neiman Marcus to close 10 Last Call Stores – USA Today
- Neiman Marcus Is Closing More Than 25% of Its Outlet Stores – Fortune
- Off-price retailers are losing their steam – New York Post
- Neiman Marcus closing 25% of off-price stores – Retail Dive
- How Barneys Is Navigating Luxury’s Slowdown – Fortune
- Neiman Marcus Puts Itself Up For Sale As Business Shrivels – Fortune
- Who will buy Neiman Marcus? – RetailWire
DISCUSSION QUESTIONS: Will Neiman Marcus’s shift back to its full-price business model affect other retailers who have focused more on off-price? How do you see luxury retail and off-price within the department store channel shaking out in the near future?