After finally confessing that they too have been affected by the recession, retailer Neiman Marcus has just announced its plans for recovery. The company reported a net loss of $3.1 million and a comparable
revenue decline of 25.1 percent at end of its last quarter in May. At an earlier point the Dallas-based department store had considered itself untouched by the decreasing sales that were taking place throughout the retail world. The store's management was even criticized by some for not being flexible to what was called "the new customer psychology" of being more frugal with spending. But today, president and chief executive officer Burt Tansky admits that Neiman Marcus has been hit just as hard as any other retailer and is making plans for an eventual recovery. On the store's strategy to pick up sales in the coming seasons, Tansky said, "It will come slowly — not a breakout as seen in the past.The customer will be more specific and cautious. We
are assuming no change in the economic environment at least through the
Details of the recovery plan include salary and staff cuts at stores and headquarters, reducing overall spending by $125 million on an annual basis, offering new types of special events to lure customers which will be more intimate and possible charity-based, cutting store hours, postponing upcoming store openings, and eventually bringing down prices of most merchandise. That last one will be a tough pill to swallow for a company that has always prided itself on high end designer collections and exclusive events. But it seems the formerly rigid NM group is realizing that in today's market, no matter what labels you stock, you need to first be flexible to survive.
Article and Photo Source: WWD
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