Luxury department store puts a restructuring plan in motion

Neiman Marcus is making moves to offset its debt and improve its capital structure.



The luxury department store’s first step was to eliminate 225 positions. Affected employees — which span all brands and operating divisions — will receive severance packages, and also be considered for other job openings within the company, according to the Dallas News.



According to the report, a company statement said the retailer is “also assessing our Last Call outlet portfolio to ensure [we are] optimizing the store footprint and ensure we have the right mix of brick-and-mortar and online stores to meet our customers' evolving demands.” Last Call stores, which average about 25,000 sq. ft., are located in outlet centers and neighborhood shopping centers.



Neiman Marcus is also taking steps to adopt operations that reflect customer shopping habits. Specifically, the retailer expects to use digital solutions, including analytics, to provide a more personalized shopping experience, the Dallas News reported.



These decisions come on the heels of Neiman Marcus’ recent announcement that it will not to pursue a potential sale to Hudson’s Bay Company. Despite this decision, the retailer continues to face disappointing earnings.



Neiman Marcus' total revenues fell 4.9% to $1.11 billion in the third quarter, ended April 21, down from $1.17 billion in the year-ago period. Same-store sales decreased 4.9%.



The company reported a net loss of $24.9 million for the quarter. This compared to net earnings of $3.8 million for the same period last year.



In March, Neiman Marcus announced that it was exploring options. Much of the company’s heavy debt load stems from its $6 billion leveraged buyout in 2013. The retailer is also challenged with declining sales due to increased online and fast-fashion competition.



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