Hudson's Bay considers buying luxury chain Neiman Marcus: reports
This March, 11, 2009, file photo, shows the Neiman Marcus store in Dallas. (AP Photo/Tom Pennington, File)
The Canadian Press
Published Tuesday, March 14, 2017 2:29PM EDT
NEW YORK -- Luxury retailer Neiman Marcus says it's exploring strategic alternatives including a possible sale of the company.
The announcement Tuesday came as the retailer, which also operates Bergdorf Goodman, reported a loss in its second fiscal quarter that ended Jan. 28 and its sixth consecutive quarterly drop for a key revenue measure.
Like many department stores, Neiman Marcus has been wrestling with declining customer traffic and sluggish sales as shoppers increasingly buy online. Even in the world of luxury, affluent shoppers are dramatically changing their habits and are buying designer bags and clothes online on places like eBay or consignment shops.
"The high-end brands are losing momentum," says Marshal Cohen, chief industry analyst at NPD Group Inc., a market research firm. He said the average price for a luxury item dropped 5 per cent last year from the prior year.
Neiman Marcus didn't specify which retailers it was looking at. The Wall Street Journal reported that the company is in discussions with department store operator Hudson's Bay Co., which has been on an acquisition spree over the past few years and operates such stores as Saks Fifth Avenue, Lord & Taylor and its namesake chain. In February, reports were swirling that Hudson's Bay was looking at taking over Macy's Inc., whose plans to reinvent itself haven't been enough to turn around its business. Neiman Marcus didn't immediately respond when asked for comment, and Hudson's Bay says it doesn't comment on rumours.
"We selectively evaluate opportunities to accelerate the company's strategic growth while maintaining or enhancing its credit profile," Hudson's Bay said in a statement.
Neiman Marcus says it has not set up a timetable for completing the evaluation. The chain known for its lavish holiday catalogue was bought by Ares Management LLC and the Canada Pension Plan Investment Board in 2013.