Commenting on second-quarter results released Thursday, Burt Tansky, president and chief executive officer of The Neiman Marcus Group, took several shots at rival Barneys New York. Barneys is on an expansion drive of its own that kicks off today with the opening of a new flagship in Boston's Copley Place complex, its first in 13 years.
Tansky, though, isn't that impressed. "We are very aware of the Barneys rollout strategy," he said in a conference call with analysts. "In fact, here in Dallas [where Neiman's is based], Barneys is opening an 80,000-square-foot store. We understand their strengths and weaknesses and we are watching very carefully whether they have the ability to manage a network of stores outside of New York. That takes a lot of art and skills. We know the merchandise mix very well."
As for Barneys' new 45,000-square-foot store in Boston, Tansky said, "We are and will continue to be very competitive, but it's far too early to tell what impact it will have on our store. The new guy in town always gets a little bit of a rush with new customers, but that tends to last rather shortly.
"I don't think at this point it is going to have any kind of terrific impact on our business," he continued. "We have been beefing up areas, especially our contemporary areas, which Barneys seems to have some strength in. But generally, we have a very different mix and customer base and we have been operating very well against them in Beverly Hills," where Barneys has another flagship.
"At the end of the day, we are a very large company, much larger than they are, and larger on a store-for-store basis where they operate. I don't expect to give up any ground to their rollout."
The comments came as Neiman's, despite a strong underlying performance, reported a 95.7 percent decline in net earnings for its second quarter ended Jan. 28 as a result of $50 million in special charges related to its acquisition by Texas Pacific Group and Warburg Pincus.
Net earnings fell to $3 million from $70.9 million. The $50 million in items involved amortization costs and asset valuations.
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