Neiman Marcus CEO Karen Katz made something very clear to investors on the luxury retail chain’s third quarter earnings call on Tuesday: The retailer will not be sold, not to Hudson’s Bay or anyone else.
Neiman Marcus, No. 41 in the 2017 Internet Retailer Top 500, had announced plans to explore a sale back in March, with speculation emerging that Hudson’s Bay Co. (No. 81) could be a potential buyer. Katz told analysts on Tuesday that will not, in fact, be happening.
“At this time, any conversations regarding a partial or full sale of the company have terminated,” she said. “While looking ahead, we know challenges remain but we are encouraged by the strategies we have in place to improve our operational efficiencies and financial performance.”
Neiman Marcus reported on Tuesday that online accounted for 32.0% of sales in the third quarter ended April 29, or $355.7 million, up 2.4% from $347.3 million during the same time last year, when online sales accounted for 29.7% of total sales. For the first nine months of the fiscal year, online accounted for 30.9% of total sales, or $1.108 billion, up 0.3% from $1.104 billion last year, when online accounted for 28.9% of total sales.
The retailer has for months been dealing with issues related to the implementation of its new cross-channel merchandising system called NMG One, issues that have cost it at least $55-65 million in unrealized sales so far. The actual dollar figure is likely greater, but the retailer writes in its Q3 earnings release that it cannot fully measure it.
Katz had told analysts on the retailer’s Q2 call in March that those problems included not showing online shoppers the right products and not fulfilling orders quickly enough. On Tuesday, she said that those issues have been addressed.
“Our online business specifically at Neiman Marcus and Bergdorf’s has been impacted significantly because of NMG One,” she said. “Our online business as we’ve moved into May and early June has improved from there because we have stabilized the system and I think that’ll just continue to improve as we move forward.”
- Net revenue of $1.111 billion, down 4.9% from $1.169 billion last year.
- A year-over-year comparable sales including e-commerce decline of 4.9%.
- A net loss of $24.9 million, compared to a $3.8 million profit during the same time last year.
For the first nine months of fiscal, Neiman Marcus reported:
- Net revenue of $3.586 billion, down 6.2% from $3.821 billion last year.
- A year-over-year comparable sales decline of 6.6%.
- A net loss of $165.5 million, compared to a $1.1 million profit last year.