After just a year and a half on the job, Donald T. Grimes has resigned from the Neiman Marcus Group where he served as executive vice president, chief operating officer and chief financial officer.
The Dallas-based luxury retailer said, “Mr. Grimes’ resignation was not the result of any disagreement with the corporation regarding its operations, policies or practices.” The company did not specify why Grimes left. A successor was not named.
Grimes joined Neiman’s in June 2015 from Wolverine World Wide Inc. where he was senior vice president, chief financial officer and treasurer. Earlier, he worked at Keystone Automotive Operations and Brown-Forman Corp. and Coopers & Lybrand.
Neiman Marcus Group has been suffering from sales declines, low traffic in its stores, particularly among foreign tourists, the low price of oil hurting Texas stores, as well as markdowns and debt burdens. Pressures are compounded by the desire of its owners Ares Management and the Canada Pension Plan Investment Board to sell the business. There has been recent speculation that the Hudson’s Bay Co. has been in the capital markets lining up the financing to buy Neiman’s, but sources have said no deal is in the works and that potential suitors have been turned off by the asking price.
On the positive side, Neiman’s has aggressively brought its inventories in line with the soft demand. Executives have said there will be fewer promotions, and a greater amount of differentiated merchandise with exclusives and additional receipts from hot brands such as Gucci, Chloé and Gianvito Rossi, among others.
The Dallas-based retailer recently launched the final phase of its NMG One common merchandise system for better planning, markdown optimization and maximizing the efficiency of inventory across channels. Glitches have been experienced and are expected to be resolved, though results for the first quarter of Neiman’s fiscal year will be impacted. NMG One became fully live at the end of August.
Despite challenges, executives have said that the Neiman Marcus store in Manhattan’s Hudson Yards is on schedule to open in 2018. It will be Neiman’s first New York City store. In addition, Bergdorf Goodman’s women’s store is expanding to 4 West 58th street, adjacent to the existing store, to free up space for women’s. The eighth floor will unveil new selling space in 2018, and there will be additional space added subsequently. BG has not revealed what categories will be sold within the new selling space.
Officials have said NMG still has more than ample liquidity to meet its debt obligations. NMG has about $4.5 billion in debt.
For the entire fiscal year, Neiman’s reported a net loss of $406.1 million including non-cash impairment charges compared to net earnings of $14.9 million in the prior year. Adjusted EBITDA decreased to $584.9 million from $710.6 million in the prior year.
Total revenues were $4.95 billion, a decrease of 2.9 percent compared to total revenues of $5.1 billion in the prior year. Comparable revenues decreased 4.1 percent.
Neiman Marcus Group operates Neiman Marcus, Bergdorf’s, Mytheresa, Cusp, Horchow and Last Call.