DALLAS — Upper-income shoppers who help make up the most robust part of the economy are lifting results at Neiman Marcus.
The Dallas-based retailer’s CEO, Geoffroy van Raemdonck, said its customers are driving up sales and profits as they shop to go back to work, attend social events and return to their regular pace of travel.
“We know the stock market especially has been highly volatile and can impact our business, but the confluence of real estate and oil prices being sky-high” is fueling demand, van Raemdonck said.
Wealthy consumers own both real estate and oil and gas stocks and assets, especially in Texas, where families pass down energy-producing assets that generate royalty income.
He’s watching inflation and other economic factors but said, “We’re looking to capture the tailwinds of what’s fueling demand now and monitoring the headwinds of inflation.”
Here are five takeaways about today’s luxury shoppers:
1. The customer is on average seven years younger.
More than 60% of the company’s customer base is now Gen X, millennials or Gen Z, moving the average age of its customers from the mid-40s to the high 30s.
2. Neiman Marcus is acquiring more new customers who spend at least $10,000 a year with the retailer.
And 1 in 6 new customers come back within the first 90 days.
3. They’re buying top-20 brands that are up 70% from pre-pandemic levels.
Sales of men’s apparel and shoe categories, women’s shoes and handbags are up by double-digit percentage increases vs. 2019.
4. They’re everywhere.
Shoppers are strong across the retailer’s 36 Neiman Marcus stores, two Bergdorf Goodman and five clearance centers. Half of the retailer’s stores are generating sales at the highest level in their history. And two-thirds of its stores are performing at the highest sales levels of the past decade.
5. Shoppers are responding to special brand activations.
Events in key stores have been a hit, such as the recent Prada popup at the Neiman Marcus at NorthPark that brought in more than $10 million in sales in two days.
Neiman Marcus is privately held and doesn’t disclose its quarterly results, but van Raemdonck said sales in the spring quarter that ended in April recorded a 30% increase from the same period last year.
Profitability is also up with more consumer purchases made at full prices. Inventories, after being historically and noticeably thin last fall, have returned to pre-pandemic levels. Stores added 220 new brands for spring, and existing brands expanded into more locations.
Van Raemdonck said the company has well over $1 billion in liquidity and plans to spend $300 million to upgrade its stores. Up next for renovations are Bal Harbour, Florida; Atlanta; Westchester, New York; St. Louis; Oakbrook, Illinois; Houston; Paramus, New Jersey; San Diego; and Tysons Galleria outside Washington, D.C.
The company also is spending $90 million on its supply chain that’s focused on its Dallas distribution center in Pinnacle Park. It will exit its Irving distribution center, which it has already sold, by the end of this year.
About $200 million is being invested in technology. Bergdorf Goodman, which has seen its e-commerce business double since 2019, is expanding its e-commerce business outside the U.S. next year as part of an investment in Neiman Marcus by Farfetch.