DALLAS (1080 KRLD/CBS MoneyWatch) – Dallas-based Neiman Marcus could be up for sale in a challenging time for retailers.
According to reports, the luxury retailer is nearly $5 billion in debt, has seen a slide in sales after a recent company wide switch to a new computer system. Last fall, the company’s lenders allowed it to extend the maturity on its credit line from 2018 to 2021, giving it more time to repay debt says industry watchdog Market Watch.
Department stores have been struggling for years, according to CBS Money Watch. While discount chains are doing brisk business, stores with mid-range price points are grappling with lower foot traffic, higher real estate costs and more consumers shopping online. And with more manufacturers connecting directly with shoppers, through online media or even their own retail channels, department stores have sometimes found themselves tussling with the very goods they stock.
“It (the new system) has never worked, they have no idea what the inventories are,” KRLD Business Analyst David Johnson said. “They said they’ve probably lost over $100 million in sales because of that.”
Johnson spoke with former Neiman Marcus CEO Allen Questrom about the state of retail and the rumor that Neiman Marcus has hired a debt restructuring firm – and is now exploring a possible sale.
“We’re not going to go out of the ‘brick and mortar’ businesses, it still does over 85% of the business,” said Questrom. “The question is how do make the store exciting and a place that people want to go down and visit.”