Aspiring luxury shoppers pulled back during the holiday shopping season and are still timid about spending, according to Neiman Marcus, while the devoted luxury customer hasn’t missed a beat.
“Luxury shoppers remain resilient, but we’re really seeing a slowdown from the customer who shops our entry-level price points,” said Neiman Marcus CEO Geoffroy van Raemdonck.
The Dallas-based retailer said Wednesday that its holiday quarter sales from November through January increased 3% from a year ago and were up 11% from the pre-pandemic quarter in 2019. That’s still below the high inflation rates that have persisted across the economy since 2021.
But customers with a real affinity for luxury are still spending strong. Sales in the holiday quarter increased 8% from its most loyal customer group and 3% overall.
The retailer’s top 2% of its customers drive about 40% of total sales and the group is courted with special events and designer appearances.
Throughout the holiday season, Neiman Marcus and Bergdorf Goodman stores hosted 550 events including luxury jewelry dinners and activations of new shops. The customer relationship building will continue this spring with appearances at stores by designers Stella McCartney, Donatella Versace, Christian Louboutin, Brunello Cucinelli, Adam Lippes and Bach Mai.
Women’s designer apparel, particularly dresses, “saw a new resurgence and growth as luxury customers returned to a lifestyle filled with special events and glamour,” the retailer said. Shoes, handbags and men’s posted positive sales but at a more normalized rate.
Neiman Marcus Group was profitable in its second fiscal quarter, but margins were challenged by higher inventories and a more promotional environment that van Raemdonck said he expects will continue through spring.
Markdowns after Christmas were broader and steeper, he said adding, Neiman Marcus is working with its brands to refocus buying.
“I don’t have a crystal ball, but there’s volatility,” van Raemdonck said. “It’s important to right-size inventories.”
Some of the deceleration is just getting back to normal, he said, after the post-pandemic splurge that gave many retailers strong results in 2021 and 2022.
Neiman Marcus sales increased 33% to $5 billion in its fiscal year that ended July 2022.
“We had outsized growth last year and most categories including men are continuing to normalize,” van Raemdonck said.
There was a deceleration in spending in August and then again in October, he said.
The company just completed a round of layoffs that represented less than 5% of its total workforce of 10,000 and included about 100 corporate staff jobs.
Twitter: @MariaHalkias
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