Neiman Marcus is taking a step back from its discounting strategy and closing 10 of its 38 Last Call outlet stores. The upscale department store chain wants its Last Call stores to stand out by offering consumers more merchandise from its full-line stores in proportion to the made-for-outlet merchandise that offers higher margins, but isn't what shoppers primarily look for. Fewer Last Call stores to ship clearance merchandise to means more product for the remaining stores.
"This decision is about optimizing our Last Call store portfolio to deliver the best customer service and freeing up resources to support new initiatives for our full-line Neiman Marcus and Bergdorf Goodman channels," Elizabeth Allison, senior vice president of Last Call, told Fortune. "We're investing in our strengths as the clear leader of high-end luxury retail."
Total Retail’s Take: Times have been tough recently for Neiman Marcus. The retailer has reported seven straight quarters of declining comparable sales. To reverse that trend, Neiman Marcus turned its attention to its Last Call discount stores. However, this move seemed to damage the brand's luxury image and instinctively had shoppers looking for lower prices. Both Saks Fifth Avenue and Nordstrom, top competitors of Neiman Marcus, have seen sales at their department stores slow even as their outlet businesses boom. Barneys also closed a portion of its discount outlet stores a few years ago to restore its image of luxury, not discounting.