March 16th, 2017
Brick and Mortar Meltdown: Neiman Marcus for Sale
As traditional brick and mortar stores continue to struggle in the digital age it’s easy to see that changing dynamics are leaving a lot of businesses in the dust. It’s clear that ecommerce is having a tremendous impact on the retail industry and those companies that fail to quickly adapt risk going the way of the dinosaurs. As I’m sure many of you have read this week traditional retail power Neiman Marcus is considering some options that include selling off their business as they try to shake some bad debt amid slumping sales.
This whole scenario just shows the importance of understanding the retail trends and maneuvering your organization in a manner that allows them to capitalize on paradigm shifts rather than succumb to them. Even well established and respected brands like Neiman Marcus are susceptible to this. When you fail to stay ahead of the curve or adapt to the changing winds, as many brick and mortar retailers have done, you end up making bad moves with limited options forced upon you.
Our CDMO Peter Gold has some great insights on this matter, and shares his thoughts on the topic below. You can also read more about this Neiman Marcus story here on WWD.com. This is just one more reason to be glad you own the best retail site online – SHOP.COM!
“Today’s announcement by Neiman Marcus Group is not a surprise & was 100% predictable. As with every such announcement, it is preceded by the phrase “amid declining sales and earnings.” The traditional brick & mortar retail business model has been dead for years yet industry stalwarts such as Neiman Marcus, Macy’s, The Limited, JC Penney, Sears, Kmart & many others have continued to execute on these broken plans with blinders on. There are even operators who have good ecommerce & mobile commerce businesses but still have continued to spend recklessly to expand their physical footprints at a huge cost to stakeholders.
I am personally a customer of Neiman Marcus, both in-store & online. I believe they do a very good job in both respects. It appears, unfortunately, that Neiman Marcus Group became the victim of its own acquisition – when Canada Pension Plan Investment Board & Ares Management bought the company for $6 billion in 2013, the company was saddled with debt to fund the purchase. As I’ve said before – this will not be the last we hear of similar operators having to face the music for their lack of vision & continuing failures. The days when retailers “owned” their customers are over; now the customer reigns supreme, is sophisticated, is resourceful & has myriad choices regarding virtually everything. The smart digital players who are listening to their customers & providing a superior omnichannel customer experience are reaping disproportionate market share while their “head in the sand” counterparts ignore the retail meltdown trend that is beyond undeniable.”
CDMO, Market America | SHOP.COM