Online now accounts for nearly 30% of Neiman Marcus’ sales.

Problems implementing a new cross-channel merchandising system cost Neiman Marcus up to $35 million during its fiscal first quarter of 2017.

Neiman Marcus, No. 36 in the Internet Retailer 2016 Top 500 Guide, reported online sales accounted for 29.2% of overall sales in the first quarter ended Oct. 29, or $315.1 million, down slightly from $315.7 million last year.

In a filing with the U.S. Securities and Exchange Commission, the company writes that problems related to the implementation of NMG One, its new cross-channel merchandising and distribution system, negatively impacted online and offline sales.

“These issues primarily related to the processing of inventory receipts at our distribution centers, the transfers of inventories to our stores and the presentation of inventories on our websites,” Neiman Marcus writes. “These issues prevented us from fulfilling certain customer demand in both our stores and websites that we estimate resulted in approximately $30 to $35 million of unrealized revenue.”

For the fiscal first quarter ended Oct. 29, Neiman Marcus reported:

  • A year-over-year total comparable sales decline of 8.0%, compared to a 5.6% decline last year.
  • Net revenue of $1.079 billion, down 7.4% from $1.165 billion.
  • A net loss of $23.5 million, compared to a net loss of $10.5 million.