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Sunday, June 13, 2021

Neiman Marcus faces rift with big luxury labels including Gucci

Neiman Marcus shops seem like shedding their grip on Gucci baggage and different luxe items because the swanky retailer emerged from chapter final fall, The Post has discovered.

Six months after shedding most of a punishing, $5 billion debt load by Chapter 11, the Dallas-based luxury chain is struggling to maintain its shops stocked because it faces weakened ties with main vogue labels including Gucci, sources instructed The Post.

The relationship with Gucci seems notably strained, insiders say. The iconic Italian vogue label, which costs greater than $300 for a pair of rubber slides, is not obtainable on the Neiman Marcus Web website. Only seven of its 37 shops now carry Gucci merchandise, in keeping with the location.

Before Neiman’s chapter submitting final spring, most of its shops had carried Gucci’s expensive wares, sources instructed The Post. And rival Saks Fifth Avenue continues to supply Gucci items, including footwear and jewellery, each in shops and on-line.

“That Saks has all that merchandise and Neiman’s doesn’t is an indication of [a] falling out,” mentioned one high business supply, noting that the 2 chains usually mirror one another’s choices.

The obvious rift comes as Neiman Chief Executive Geoffroy van Raemdonck — who has racked up hundreds of thousands of {dollars} in bonuses earlier than and because the chapter — has been blasted by staffers for a tone-deaf method to belt-tightening, flaunting his wealth in a shiny journal unfold final fall at the same time as pink slips have been being handed out.

It’s not simply staff who’ve been getting stiffed. Vendors smarting from unpaid payments have been ramping down their business with Neiman, in keeping with sources. Even the companies that present insurance coverage for deliveries to Neiman are tightening their phrases or suspending protection, in keeping with company paperwork.

Neiman Marcus CEO Geoffroy Van Raemdonck and husband Alvise Orsini. The has racked up millions of dollars in bonuses before and since the bankruptcy.
Neiman Marcus CEO Geoffroy Van Raemdonck and husband Alvise Orsini. The has racked up hundreds of thousands of {dollars} in bonuses earlier than and because the chapter.
Getty Images

Delayed funds to suppliers on account of the chapter “have restricted, and may continue to restrict, our ability to purchase new inventory from certain vendors,” Neiman instructed traders in a confidential March 18 monetary doc, a duplicate of which was obtained by The Post.

Firms that insure deliveries, in the meantime, are “limiting or terminating coverage,” Neiman mentioned in doc, produced in conjunction with a latest $1.1 billion debt providing.

Neiman in a press release mentioned it continues to have robust ties to its high distributors. “We have excellent and longstanding relationships with all our brands and any insinuation that this is not the case is categorically false. We’ve retained all of our top 50 brands,” the company mentioned.

Gucci’s mother or father company, French luxury items conglomerate Kering, which additionally owns Saint Laurent, Bottega Veneta and Balenciaga, didn’t reply to requests for remark.

The pandemic has been brutal for luxury shops and Neiman has been no exception. Moody’s Investors Service just lately added Neiman to its chapter watch record. Neiman’s in-store gross sales plunged 34 p.c over the six months ended Jan. 30, whereas its on-line gross sales dropped 6 p.c over the identical interval, in keeping with the confidential March 18 monetary doc obtained by The Post.

The company in a press release mentioned it’s “seeing double and triple digit increases in purchases from our top luxury groups compared to pre-COVID.” But within the doc to traders it mentioned quarterly gross sales by March 15 have been on the decline versus final year, albeit displaying indicators of enchancment.

Shoppers enter and exit the Neiman Marcus at the King of Prussia Mall in Pennsylvania.
Neiman in a press release mentioned it continues to have robust ties to its high distributors.
Mark Makela/Reuters

Neiman staffers instructed The Post that gross sales are tanking partly as a result of there’s much less stuff obtainable on cabinets and in warehouses.

“The biggest complaint from the stores is lack of merchandise,” one Neiman worker instructed The Post. “We simply don’t have the stock we used to have.”

“From the store point of view there is concern about Louis Vuitton. The inventory is there but not as much as before. Or the selection has shrunk and there are fewer choices than in the past,” mentioned the worker, who requested to not be recognized.

A second Neiman worker mentioned Kering’s non-Gucci luxury manufacturers, including Balenciaga and ready-to-wear and Saint Laurent, are nonetheless obtainable however have been more durable to search out within the shops and warehouses.

“I feel like I’m in a catch-22,” the gross sales rep mentioned. “We must reach out to customers [but] then [we] find out we don’t have the stock either in store or in our warehouse.”

Some sources declare van Raemdonck’s large value chopping has worsened the scenario. Neiman acknowledged within the March 18 doc it has been shedding expertise, saying “several executives have departed the company in recent years.”

“We rely on the experience of our senior management, and their knowledge of our business and industry would be difficult to replace,” the doc mentioned. “Several executives have departed the company in recent years.”

About a dozen high executives have left or been pushed out over the previous two years, in keeping with press releases and sources near the company. Among them was former head of merchandising Jim Gold, a 29-year veteran who left in 2019 and was succeeded by Lana Todorovich as president and chief merchandising officer.

Some business sources claimed Todorovich — who beforehand labored for American vogue shops Ralph Lauren, Perry Ellis and Calvin Klein — lacked the identical ties to European luxury labels.

“Fashion is a relationship business,” mentioned a supply near the company. “There is very little institutional knowledge at Neiman Marcus now. Virtually everyone is gone from the previous regime.’”

Gary Wassner, chief govt of Hilldun Corp., which insures attire shipments, confirmed that a few of his purchasers are solely offering items to Neiman on a restricted foundation or beneath stricter cost phrases.

“Everyone want to see some more performance now that they are out of Chapter 11,” he mentioned.

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