Neiman Marcus profits rise as sales inch up
GDA Staff -- Gifts & Dec, September 24, 2008
Dallas – Upscale retailer Neiman Marcus Inc. turned in a bigger net profit this year than last, even though sales increases have been tough to come by.
Luxury mail-order catalog The Horchow Collection, for example, experienced declines in sales during the fourth quarter – part of challenges across the home sector. During today’s quarterly and year-end conference call, Burt Tansky, president and ceo of Neiman Marcus Group, said, “As we have said for some time, our home business has struggled consistent with others in the industry.”
For the fiscal year ended Aug. 2, Neiman Marcus recorded a net profit of $142.8 million, up 21.6% from $111.9 million in 2007. Revenues grew 4.8% to $4.6 billion, as comp store sales rose just 1.7%.
Operating earnings were slightly off for both the specialty retail store unit (which also includes Bergdorf Goodman) and direct marketing segment, while revenues showed modest growth in both areas.
The company made up for soft operating profit with reduced interest expense, as well as the fact that 2007 net earnings were impacted by $22.8 million in losses from discontinued operations – which also included a value writedown on the Horchow trade name.
Tansky said of Horchow that it “continues to analyze our approach to this business, looking at everything from merchandise assortments, inventory commitments, catalog production and prospecting to mitigate the continued slowness in this business.” He added, “We believe the environment and the resulting sales trends will improve.”
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