In an effort to align itself with consumers’ current shopping habits, the luxury retailer has announced reorganization plans.
The full extent of the strategy was not specified but the company revealed to the Dallas News its plan to eliminate 225 jobs, with fewer than 10 percent of the cuts coming from its headquarters in Dallas. In some cases, affected employees will be considered for other positions.
In a statement, the retailer said it continues to “evaluate all aspects” of its business.
With foot traffic sluggish, one area which it must address is meeting consumers’ digital demands. To that end, Neimans said its looking to strengthen its data analytics and bolster its online portal, which accounts for 30 percent of revenue, according to CEO Karen Katz speaking during Neiman Marcus’ latest earnings call.
Driving much of this need for change is millennials, which make up 50 percent of the retailer’s customers. These consumers want for the retailers’ traditional level of service in some areas while in others, they’d rather go it alone. Katz noted Neimans must adapt its service model, which is relationship based, to serve them both online and in store.
The retailer is also focusing on offering exclusive product to stave off price shoppers, providing personalized marketing and developing buy now, wear now assortments.
[Read about how department stores are faring: June Swoon for Retail Sales as Department Stores Flat]
The company’s recent financial difficulties, which primarily stem from a $5 billion debt load, have been well documented and have raised serious red flags by credit ratings companies. This year alone, the retailer has had to abandon a planned IPO and put itself on the market, only to take itself back off the market when rumored talks stalled.
For the third quarter, Neimans reported a revenue decline of 4.9%, down to $1.11 billion compared to the same period one year prior. The company saw a net loss of $24.9 million, compared to net earnings of $3.8 million for the quarter.
The current shake up could also affect the company’s off-price chain, which has seen five store closures this year. Though no specifics were offered, Neimans has left the door open for additional Last Call closures. Tellingly, Katz was fairly brief when a journalist asked about Last Call during the earnings announcement last month, saying that Neimans is focused on its full-line stores and online business.
“We are also assessing our Last Call portfolio to optimize our store footprint and ensure we have the right mix of brick and mortar and online stores to meet our customers’ evolving demands,” Wednesday’s statement read.
Neiman Marcus is just the latest department store to announce job cuts. Sears, Sears Canada and Hudson’s Bay are among those that have also let hundreds of employees go this year.
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