Neiman Marcus will cut about 500 jobs within the outlet operation, though some employees will be placed in other roles within the company.

(Bloomberg)—Neiman Marcus Group Inc., No. 50 in the 2019 Digital Commerce 360 Top 1000, will close the majority of its outlet shops and lay off hundreds of employees as the luxury retailer focuses on selling full-price goods at its department stores.

Most of the company’s Last Call discount locations will shutter over the next eight months. Neiman Marcus will cut about 500 jobs within the outlet operation, though some employees will be placed in other roles within the company. Another 250 store-associate positions will be eliminated in the reorganization as well.

The moves also include selling two Texas distribution centers and merging e-commerce and in-store retail teams, according to a statement.

“We’ve realized our model is to focus on the luxury customer who buys full price,” CEO Geoffroy van Raemdonck said in an interview. “The model of Last Call was not core to our business.”

Luxury focus

The Dallas-based company, which owns its namesake chain and luxury store Bergdorf Goodman, has struggled to find its footing as shopper traffic to malls and department stores declines. The company is navigating changing consumer tastes while wrestling with a heavy load of debt.

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Last Call serves as Neiman Marcus’s discount chain, with 22 stores in the U.S. Though most will close, executives plan to keep some open to serve as clearance racks for residual inventory.

The move will allow Neiman Marcus to focus on its big-spending luxury customers and free up resources to invest in its full-line department stores, the company said. Last year, Neiman Marcus opened a flagship location in New York City, establishing a beachfront in America’s luxury capital.

Store additions

The company will also bolster its store services and is considering adding more coffee shops and bars to attract people at different times during the day. It will look to expand the kinds of paid services available at the New York shop, such as beauty treatments and florists, to additional locations.

Management also said they would reinvest the proceeds from the planned sale of two Texas distribution centers elsewhere in the supply chain in order to improve shipping times for online shoppers.

“You really need to think beyond the transaction,” said van Raemdonck. “The growth for us is really when we build a relationship that’s beyond a product.”

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