Costs Push Neiman Marcus into Q3 Profit Loss

DVF at Neiman Marcus stores

DVF at Neiman Marcus stores

Dallas—Though its sales were up 6%, Neiman Marcus Group Ltd. today reported a swing into a third quarter loss mostly due to expenses relating to inventory-related accounting and transaction costs.

For the quarter ended May 3, the parent to Neiman Marcus and Bergdorf Goodman posted a net loss of 2.67 million compared with a profit of $70.77 million in the year-ago quarter.

Investing in New Stores

Excluding purchase-accounting impacts and acquisition related costs to its purchase last fall by investor group Ares Management LLC and Canada Pension Plan Investment Board, adjusted earnings would have been $45.1 million.

Neiman Marcus also incurred $4.5 million in costs associated with its cyberattack and a $1.5 million loss in equity in regards to the company’s April exit of Chinese website Glamour Sales Holdings.

Net sales rose increased to $1.16 billion from $1.10 billion a year ago. Comparable store sales were up 5.9%. Stores posted a 4.2% increase in sales while online sales increased 11.7% to $271 million.

Moving forward, Neiman is looking for opportunities to reallocate space and renovate some of its current stores.

“We’re fortunate that our new owners (Ares Management LLC and Canada Pension Plan Investment Board) are focused on investing into our new stores with an eye on long-term growth,” CEO Karen Katz said during a conference call with analysts. She added that the company will allocate greater capital to highly productive stores in gateway cities.

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Jeff Prine

Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology.