Neiman Marcus CEO Burt Tansky discussed his plans for steering the luxury retailer on a steady course through the recession.
Tansky doesn't see a recovery for the store until 2010 and is implementing practical measures to pull the store out of a downturn.
Tansky and his team on Wednesday projected a proactive stance and detailed a recovery plan, citing:
-- Salary and staff cuts at stores and headquarters, including centralizing marketing and fashion office functions to further reduce payroll and create a consistent and focused voice to consumers. Previously, there were separate marketing teams at Neiman's, Bergdorf Goodman and NM Direct. Overall, NMG is operating with 16 percent fewer associates than a year ago.
-- Reducing inventories, with receipts down 25 percent for fall, although they are not expected to be aligned to demand for several seasons, as Neiman's works to flow through fashion products faster than basics.
-- Overall, reducing expenses by $125 million on an annual basis.
-- Creating new types of special events to lure customers. They're often smaller and more intimate, and involve charities and gift card opportunities.
-- Negotiating with developers to possibly postpone store openings, but not this September's opening in The Shops at the Bravern in Bellevue, Wash., a suburb of Seattle. The store will mark Neiman's debut in the Pacific Northwest. "We are scrutinizing all proposed projects with a heightened degree before we commit capital," Tansky said. Stores are planned for Walnut Creek, Calif., and Sarasota, Fla., in fall 2011; San Jose, Calif., in 2012; Princeton, N. J., in 2013, and Oyster Bay, N.Y., where there is no opening date, as the mall there has yet to be built.
-- Trimming store hours at certain locations to better schedule associates for peak traffic hours and away from down times.
Also on Neiman's austerity agenda — bringing prices down via a shift in the merchandising mix toward more midtier pricing, within collections currently carried, without trading down.
"Let me assure you, we are not trading down," Tansky stated. "We are simply rebalancing our assortments to offer our customers more opportunities, more options within a designer collection or a classification. I am pleased to say that most [designers] were very receptive to our plans. We are confident that this process will be a very collaborative effort, though it's not happening overnight." Some initial changes will be evident this fall, but the shift will be much more noticeable for spring 2010.
Tansky is adamant that the store is not downgrading the types of fashions it will be selling, but instead that it is working with designers to lower the price points, line by line, item by item. That is similar to what executives from other luxury retailers are saying. The prices became so ridiculous for ready to wear collections that it was inevitable that they would come down.
