All things considered, the luxe consumer is feeling pretty comfy — at least according to Karen Katz, president and chief executive officer of Neiman Marcus Group.
This story first appeared in the December 10, 2014 issue of WWD. Subscribe Today.
“As we head into the final weeks before Christmas, our sense is that our customers are confident, feel good about the economy in general and their personal balance sheets, specifically,” Katz told analysts after the company posted a modest profit in the fiscal first quarter.
“They are enjoying buying gifts for their families and feel comfortable shopping for themselves,” Katz said of the luxury shopper, who has been buoyed by record highs on Wall Street.
She also offered a glimmer of hope that some freshness is returning to women’s — at least from older trends that designers have taken down from the shelf and dusted off.
“We are pleased with the merchandise arriving daily in our stores for both resort and spring, especially the Seventies references and bohemian fashion, as well as flat sandals, platform shoes…all feel and look very new and unlike anything our customer may already own,” Katz said.
The luxe chain reported first-quarter profits of $196,000, which compared with a loss of $13.1 million a year ago.
Neiman’s logged first-quarter costs of $17.6 million tied to its Mytheresa.com acquisition and the ongoing investigation into cyber attacks on its computer systems during last year’s holiday season. It has also been spending to update its stores and sharpen its digital positioning, pushing capital expenditures during the quarter up 57 percent to $56.4 million.
The retailer, which was acquired by Ares Management LLC and Canada Pension Plan Investment Board in October 2013, saw sales for the three months ended Nov. 1 rise 5.1 percent to $1.19 billion from $1.13 billion as comparable-store sales increased 5.5 percent.
Asked about how the sharp drop in oil prices is hitting the Dallas-based business in its home state, Katz said some customers could be impacted, but noted that Neiman’s was geographically diversified, with seven stores in California, for instance.
In an interview following the call, James Skinner, chief operating officer and chief financial officer, said lower oil prices would help the economy overall.
“Anything taken out of one’s pocket is going into somebody else’s pocket,” Skinner said.
Geographic diversity is a bit of a budding theme at Neiman’s, as shown by the acquisition of Munich-based Mytheresa.com.
“It’s a big market out there,” Skinner said. “And there’s plenty of competition locally. There’ll be a lot of competition out there. We feel very good about luxury growth worldwide, not just in the U.S.”