Neiman Marcus whirlwind has further accelerated downwind by deciding to pull the plug on its plans for its Initial public offer (IPO)
The Neiman Marcus company had been preparing for it’s IPO since August 2015 until recent cancellation. Fortune reports net losses growing to $23.5 million, which is a is almost double of the net loss compared to Q1 2016 of $10.5 million, and total revenues keep falling by 7.4% to $1.08 billion (from $1.16 billion in the year-ago period) and even same-store sales fell 8% amid dwindling traffic.
The situation is lamentable as Neiman has made large investments in modernising its inventory systems and its e-commerce presence. Luxury shoppers have found ways to buy their wares straight from the runway rather than wait the typical 8 months for them to arrive at department stores.
“Our core customer is visiting us a little less frequently and customers in general are a little less loyal to any one retailer,” Neiman Marcus CEO Karen Katz admitted to investors last month.
These changes are hitting the traditional department stores hard, and Nieman has reported $258 million in losses in the last five years including this quarter and this is despite a stable global economy that normally bodes well for luxury spending.
“It is not in its best interests to proceed with the initial public offering contemplated by the Registration Statement at this time,” Neiman said in its regulatory filing. Neiman will have to find new ways to reach customers as luxury brands continue to sell direct, the purpose of high end department stores must change.