Neiman Marcus is largely getting out of the discount store business. The Dallas-based upscale department store chain announced on Wednesday that it was closing most of its 22 remaining Last Call discount stores, saying it preferred to focus on its high-end business. The closings will result in 500 jobs being eliminated by the end of the year. The company is also cutting 250 non-sales jobs at its full-line department stores. Some 40 percent of Neiman Marcus sales come from customers who spend at least $10,000 a year. And focusing on true luxury rather than discounting, repeat business from the well-heeled is the path forward for Neiman, said Neiman Marcus Group CEO Geoffroy van Raemdonck.
Total Retail's Take: While the off-price sector is one of brick-and-mortar retail's strongest at the moment, it's not right for Neiman Marcus. That's the decision the luxury department store chain is making by closing its Last Call outlet stores. Neiman Marcus no longer wants to compete for the off-price customer, who is currently more likely to be shopping at Ross, T.J. Maxx, Marshalls. Neiman Marcus is cutting its losses in that category and rededicating its focus on the luxury consumer. van Raemdonck sees Neiman's path to profitability through the luxury shopper. Rather than dilute the luxury aura of the business by remaining in the off-price category, Neiman Marcus is pushing all in on luxury. The company's earlier start in e-commerce vs. other luxury retailers and brands, comparatively speaking, gives it reason for optimism.