Neiman Marcus nearly quadruples profit and has no plans to spin off e-commerce or Bergdorf Goodman

Neiman Marcus nearly quadrupled its earnings in its fiscal first quarter as fewer discounts helped the retailer fatten its margins, according to people with knowledge of the closely held company’s earnings.

The Dallas-based company booked $156 million in earnings before interest, taxes, depreciation and amortization for the period ended Oct. 30, said the people, who asked not to be identified because the results are confidential. That’s up from $41 million in the same period last year, they said.

Quarterly revenue increased roughly 39% from a year earlier to $979 million but declined 6.7% from 2019, they said. A representative for the company declined to comment.

Neiman Marcus is joining the fray of retailers that boosted profitability by reducing markdowns.

While the lack of bargains may be disappointing to some consumers, demand is still holding up, with many shoppers making purchases early in the holiday season.

The luxury department store chain’s gross margins rose more than 8 percentage points from 2020 and more than 5 percentage points from 2019, the people said.

Comparable sales for the first quarter jumped 51% year over year and increased 7.3% from 2019, they added.

Neiman gained stronger financial footing after it shed around $4 billion of debt and closed most of its Last Call stores and six full-line stores through bankruptcy last year. The company emerged from court protection in September 2020 and is now owned by Davidson Kempner Capital Management, Sixth Street Partners and Pacific Investment Management Co.

CEO Geoffroy van Raemdonck said Bergdorf Goodman’s online sales were a significant growth driver, and that the company doesn’t plan to split up its website and physical stores into separate companies.

In a response to speculation that company might follow a plan by Saks Fifth Avenue to spin off its e-commerce business, van Raemdonck said in an email that he has no such plans and that he strongly believes in an “integrated retailing” business model with stores and e-commerce working together. Neiman Marcus customers who shop across both channels spend 4.5 times more within a year than a customer who only buys online or in-store, he said.

The company has 37 namesake stores across the U.S. and two Bergdorf Goodman stores in New York. At quarter end, Neiman had $1.1 billion in liquidity, including $395 million of cash and roughly $705 million of availability under its asset-based credit facility.

The company’s earnings were $417 million for the last 12 months, against a total debt of around $1.1 billion, the people said. Neiman’s 7.125% first-lien note due in 2026 traded at 105.5 cents on the dollar Wednesday, according to Trace.

Staff writer Maria Halkias contributed to this report.

Rachel Butt, Bloomberg

Twitter: @MariaHalkias

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