U.S. luxury fashion retailer Neiman Marcus Group reported its third straight quarterly drop in sales at established stores and a nearly 81 percent fall in profit amid a slowdown in apparel spending. Apparel retailers are struggling to attract customers as online shopping becomes increasingly popular. Also, unseasonably cool weather dampened sales of spring wear at major apparel retailers in the latest quarter.
"The prevailing sentiment across retailing is that the customer has less interest in shopping in stores, whether it be traditional department stores or other luxury specialty stores," Chief Executive Karen Katz said. Sales at stores open for more than a year fell 5 percent for the third quarter ended April 30.
Sales were hurt by international tourists spending less because of a strong dollar, while economic uncertainty due to stock market volatility and the upcoming presidential elections tempered domestic spending, Katz said. Rivals Macy's Inc , which runs the luxury Bloomingdale's chain, and Nordstrom Inc also reported lower same-store sales in the quarter.
Neiman Marcus, which also operates the Bergdorf Goodman stores and mytheresa.com, said it was working with its suppliers to reduce inventory by cancelling orders, returning excess inventory and negotiating for additional markdown allowances.
The retail slowdown has spooked suppliers such as Michael Kors Holdings Ltd and Coach Inc, which is pushing department store operators to cut back on promotions.
Neiman Marcus' net income fell to $3.8 million from $19.8 million a year earlier, while revenue dropped 4.2 percent to $1.17 billion. The 108-year-old retailer, owned by Ares Management and Canadian Pension Plan Investment Board, had filed for an initial public offering in August last year. Reuters reported in October that the IPO had been pushed to 2016 due to volatile stock markets.