Neiman Marcus Group on Wednesday dismissed the idea of separating its e-commerce from its brick-and-mortar operations. The previous day, the New York Post reported that it is mulling the spinoff of its online operations and its Bergdorf Goodman banner.
In comments to the media sent by email, CEO Geoffroy Van Raemdonck sought to contrast the retailer's strategy with that of Saks Fifth Avenue, which split its online and offline operations earlier this year. "That's not … for us," he said.
Activist investors who favor separation as a way to unlock value have so far reserved it for department stores, which several observers perceive as a sign of that sector's weakness.
As the leader of a private company, Van Raemdonck may have more freedom to dismiss this idea than do Macy's or Kohl's, which are both under pressure to consider a breakup of their online and offline operations.
Most recently, hedge fund Engine Capital slammed Kohl's for what those investors said was a disappointing stock performance and urged the retailer to mull either a split or an outright sale. After some initial resistance, Macy's is now working with AlixPartners, the firm that helped Saks Fifth Avenue with its split, in exploring new growth strategies, as Macy's CEO Jeff Gennette acknowledged how Wall Street values online pure-plays.
At Saks, which as of last year is also privately held, the move has been lucrative, attracting $500 million in private equity funds. The recently separated e-commerce company is also said to be plotting an initial public offering with a $6 billion target. The other retailers taking the path to separation are, like Saks, owned by HBC: its Saks Off 5th off-price business and Canadian department store Hudson's Bay Co.
In his remarks on the topic, Van Raemdonck echoed what several critics have said — that it would interfere with the smooth integration of all consumer channels.
Saks forged hundreds of contractual agreements in an effort to preserve some of the necessary ties among merchandising, marketing and other teams, according to people familiar with the process. That's a clue to why the maneuver is widely seen as financial rather than operational.