Neiman Marcus survival strategy: exclusive products, new technology

Neiman Marcus will focus on offering more exclusive merchandise and personalized offers to drive sales as it goes it alone to turn around its business.

The Dallas-based luxury department store chain confirmed Tuesday that discussions for a partial sale or outright purchase of the company have ended. The Wall Street Journal earlier reported that talks had stalled between Neiman Marcus and Hudson’s Bay, which operates such chains as Lord & Taylor and Saks Fifth Avenue.

“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,” Karen Katz, CEO and president, told investors during a conference call after the company released its fiscal third quarter results.

Like many luxury retailers, Neiman Marcus has struggled as even wealthy shoppers are looking for cheaper deals online.

It reported another quarter of sales declines, though business has improved as it increased its assortment of exclusive merchandise and personalized its offerings to customers. In fact, 40 percent of its evening wear is now exclusive. Katz says such moves will help differentiate the chain from rivals and get out of the slump.

The retailer reported that sales at established stores for the period ended April 29 were down 4.9 percent, less steep than the 7.3 percent drop in the previous quarter.

Katz says the fact that Neiman Marcus has only 42 stores in addition to its Bergdorf Goodman store sets it apart from the mega-department store chains. “We know our customers very well,” Katz told The Associated Press. Furthermore, 30 percent of its business is now online.

Nieman Marcus opened a new Fort Worth store in February at the upscale Shops at Clearfork shopping center. Executives called the 95,000-square-foot store, which replaced its older store at Ridgmar mall, the chain’s most technologically advanced, with features including “memory makeover mirrors” in the cosmetics area that can email pictures from makeup sessions and 360-degree mirrors in the women’s dressing room lounge.

Neiman Marcus plans to use technology to better personalize its offers online and in the store. A year ago, it beefed up its analytics team so shoppers can walk into the store and sales people with mobile devices can check what they bought and searched for on the website.

Online, shoppers find items on the site that they have searched for in the past. Neiman Marcus is also offering more targeted emails to shoppers. Neiman Marcus says that 75 percent of its customers receive a custom digest of emails, which is a key driver of traffic.

This story was originally published June 13, 2017 at 4:11 PM with the headline "Neiman Marcus survival strategy: exclusive products, new technology."