NYPost

LUXURY RETAILER NEIMAN-MARCUS PAINTS IT BLACK

By EMILY LAMBERT

September 9, 2001 -- BLACK isn’t just a color at luxury retailers this fall it’s a mood. Dallas-based Neiman Marcus Group parent company to Bergdorf Goodman, Neiman Marcus and NM Direct is feeling the pinch, scorned (or, at least, grudgingly ignored) by the buyers of $1,500 coats and other, more extravagant offerings. When the company reports fourth-quarter and annual earnings this week, it will confirm the bad news: It has negatively pre-announced that sales are down, and analysts are cutting forecasts left and right.

Neiman’s year-to-year comparisons are especially poor this year because last year the company was boosted by a host of new initiatives.

"It’s just a really tough retail environment," said Stacy Turnof, vice president at Merrill Lynch.

High-end retailing where the price tags are big feels it first, she said, and Neiman is experiencing what she terms the "negative wealth effect."

One big problem, according to Turnof, is, "A lot of markdowns."

In short, Neiman’s been forced to discount cutting directly into the bottom line.

But don’t turn up your nose just yet, investors. Eric Beder, retailing analyst at Ladenburg Thalmann & Co., advised paying attention to Neiman’s butterfly game a twice-a-year promotion that runs this month. It allows shoppers to earn double InCircle points (akin to frequent-flier miles) and could be a sales savior in an important month preceding the markdown-heavy holiday season.

And there are signs the high-end customer is coming back, Beder said. Jewelry, which normally maintains full prices even when other items are marked down, is doing well. So is couture, also resistant to markdowns.

Turnof said Neiman may start looking better in its second quarter, which ends in January.

Neiman also has location in its favor, according to some analysts.

Because the company is discriminating about where it sets up shop, it is well-positioned in the marketplace and will bounce back when the economy turns around, said Steven Kernkraut, a senior managing director at Bear Stearns.

For fashionistas, these silver linings are tinged with gray. When Neiman’s business picks up, that means fewer sale items. After all, what’s more important: high-flying stock or low-priced shoes? Tough call.

-- Anonymous, September 09, 2001