The Neiman Marcus Group has completed a small round of layoffs that included 50 jobs in the Dallas area.
A spokeswoman for NMG said the total number is “under 100 jobs in IT, buying and alterations.” She said “approximately 50 people in Dallas were affected.” The spokeswoman also said the company provided those whose jobs were eliminated “generous severance packages.”
The retailers currently employs 15,000 worldwide, and 4,400 specifically in Dallas.
Market reports pegged the total cut at 80 due in part to a company reorganization of its online and store operations. That number is much smaller than the 500 employees who were laid off in October the last time the company cut its operational overhead. That cut included nearly 160 individuals in the Dallas area.
The Dallas-based retailer has been struggling through a weak luxury market, reduced international tourist spending at gateway locations and a debt overhang from two leveraged buyouts. NMG was purchased by TPG and Warburg Pincus in 2005 for $5.1 billion. They sold the company in 2013 for $6 billion to Ares Management LLC and the Canada Pension Plan. The company has about $4.5 billion in long-term debt.
The luxury retailer’s struggles has led to rumblings that president and chief executive officer Karen Katz was on the way out but she debunked those rumors amid talk the new owners are trying to find a buyer so they can exit their investment. The latter wasn’t a surprise given that the company filed for an initial public offering in August. The IPO plans were shelved due to the challenging business environment and global market conditions that have seen more downs than ups in the rolling 12 months.
Meanwhile, the company has been aggressive in managing its cash flow. Financiers and lending institutions said that NMG also has been particularly aggressive in seeking chargebacks from suppliers when it believes there’s been an error, more so than in past quarters.
In the third quarter, the company reported its third consecutive drop in sales as disappearing tourists hurt business at gateway stores and oil patch problems hurt the Texas stores. Profits dropped 80 percent to $3.8 million from $19.8 million a year earlier, and revenues fell 4.2 percent to $1.17 billion from $1.22 billion. Comparable-store sales declined 5 percent in the quarter.
The new platform that NMG has been working on — integration of both online and in-store operations — should help the retailer to better align inventory levels and purchases with anticipated future customer demand.
The spokeswoman said NMG One — the common merchandising system — is slated to be operational on Aug. 28. She added, “Over the last 18 months, we have successfully transitioned our buying teams to align them to omnichannel.”
In addition to its core Neiman Marcus business, the company also operates Bergdorf Goodman, Mytheresa, Cusp, Horchow and Last Call.
“The organizational changes made, along with our long-term investments position NMG for future success and growth. These are difficult, but necessary, decisions that enable us to better position our business to serve today’s customer. We continue to invest resources according to how the business is going to be, not how it has always been,” the spokeswoman said.