Is the luxury department stores sector in crisis? Judging by Neiman Marcus’s latest results, it might seem so. And while the big problem is consumer purses staying snapped shut, the company is also blaming social media and, by association, some of the biggest brands out there.
Tell me more I hear you say? Well, Neiman Marcus hasn’t exactly come out screaming about how horrible everyone is being to it, but its CEO did have some complaints when delivering its latest not-too-good quarterly results.
“Today, fashion shows are now blogged and broadcast all over the world via social media. By the time the merchandise ships many months later, the newness and excitement had worn off and in many cases, the customer has moved on,” Karen Katz told analysts.
Hmmm. Many catwalk brands these days judge success by how fast and how far their social media coverage goes. The more the better seems to be the maxim. And while some have got round the excitement wearing off issue by making collections available immediately, such collections still feel a little here today, gone tomorrow compared to the more traditional seasonal collections most brand still show.
So is Karen Katz complaining as a way of deflecting attention from a weaker performance? Unlikely. The fact is, there is a crisis at the top end of the fashion industry as luxury labels grapple with a basket of issues including currency exchange effects that make dollar prices very high, lower tourists numbers due to those exchange effects and to fears over terrorism, and a low oil price that’s denting the wealth of many traditional luxury customers (and especially Neiman Marcus’s Dallas stalwarts).
All of that led the firm to report Q4 loses of $407.2m, after a hefty loss of $32.9m a year ago. Impairment charges of $466.2m were a big problem for the profits figure but the overall picture was still weak even if they were factored-out. Total sales fell 3.3% to $1.13bn and comps fell 4.1%. But at least online sales continued to grow.
Just how Neiman Marcus will cope with the boredom factor in the future, we didn’t hear. But watch this space.