Neiman Marcus' business is booming
Neiman Marcus Group has not only recovered from its bankruptcy days, but its total post-pandemic sales are growing by double-digits, CEO Geoffroy van Raemdonck tells Axios.
Why it matters: The CEO's bullish update reflects the larger trend of luxury outperforming, despite the market turmoil.
- The luxury sector grew 53% in May of this year compared to May 2019, according to Mastercard Spending Pulse.
Details: In a business update the company provided Tuesday, Neiman Marcus said gross merchandise volume in its Q3 jumped 20% compared to 2019.
- Comparable sales rose 30% last quarter versus last year.
- It also has no borrowings under its asset-based loan (ABL Facility or revolver) and has over $1 billion in available liquidity, the CEO says.
- The company's debt ratio is between 1x and 2x EBITDA.
Flashback: Farfetch invested $200 million in Neiman Marcus, which is spending the proceeds on technology and digital capabilities, according to an announcement in May.
The latest: Beyond that deal, van Raemdonck says that the retailer "constantly (has) inbounds from companies who have interest" in investing in the company.
- JPMorgan advised on the Farfetch deal and is one of its preferred financial advisers, he says.
- "We are always evaluating potential opportunities to strengthen our business and best serve our customers," van Raemdonck elaborates.
What's next: The company, which exited bankruptcy in 2020 and includes Bergdorf Goodman, is investing $300 million to renovate its stores in Bal Harbour, Florida.; Atlanta; Westchester, New York; St. Louis; Oakbrook, Illinois; Houston; Paramus, New Jersey; San Diego; and Tysons Corner, Virginia.
- It's also sinking more than $90 million into supply chain capabilities such as fulfillment centers.
The bottom line: After recovering in 2021, luxury and department stores have returned to growth this year, with wealthy customers undeterred by inflation.