Neiman Marcus turning to plus-size fashion at off-price stores
Struggling upscale department store Neiman Marcus is introducing plus-size apparel departments in five of its off-price Last Call stores, Women’s Wear Daily reports.
The trial, which could be expanded further with an “elevated assortment,” is based on demand for higher quality apparel in larger sizes, Last Call merchandising vice president Frank Crisci told WWD.
Shop-within-shop areas dedicated to several upscale labels — including activewear, day and evening dresses, tops, jeans, pants, sweaters and coats in sizes from 14 to 3X from Marina, Nic + Zoe, Julia Jordan, Not Your Daughters Jeans and Marc NY Performance — will be about 750 square feet.
As Neiman Marcus comes to terms with how to lift sales as an upscale retailer in the struggling department store segment, it may be unwilling to continue to leave money on the table.
While plus sizes have long been a neglected category in both fashion design and retail, they nevertheless represent a lucrative market, ripe for better designs and more retail channels. The NPD Group, for example, found that U.S. teens purchasing in the junior size category dropped from 81% in 2012 to 73% in 2015, while teens purchasing plus-size clothing is now 34%, compared to 19% in 2012.
In the overall women’s category, the numbers are equally compelling. NPD also found that in 2015, the plus-size market accounted for 17% of the U.S. women’s apparel market overall. Furthermore, U.S. sales of women’s plus-size apparel, which includes plus-size/full-figure, petite plus, and junior plus sizes, increased 5% in the 12 months ending February 2015 to $19.8 billion, and 3% in the 12 months ending February 2016 to $20.4 billion.
Neiman Marcus in December reported fiscal first quarter total revenues down 7.4% to $1.08 billion from $1.16 billion in the year-ago period amid dwindling traffic, including declines among the upscale department store chain's core customers. Same-store sales fell 8% during the quarter, and net losses widened to $23.5 million, compared to Q1 2016 net losses of $10.5 million.
Neiman Marcus is badly hobbled by debt and may find it difficult to turn things around, says Neil Saunders, CEO of retail research agency and consulting firm GlobalData (formerly Conlumino).
“In our view, such a debt burden is completely unsustainable for a company of Neiman Marcus’ scale,” Saunders said in a December note emailed to Retail Dive. “Indeed, even if all interest was frozen and the entirety of operating profit was to be directed to the purpose of paying down the debt, it would take well over 40 years to remove it from the balance sheet. Such a position underlines the fragile nature of the company’s finances, something that hits home when the $72 million quarterly interest payments are appreciated. This acts as a major barrier to the company being sold and makes an IPO far less attractive. It also guarantees that without a significant rise in sales, the company will remain loss making.”
- Women’s Wear Daily Neiman Marcus to Trial Plus-size Departments at Last Call
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