Discovering that there’s less demand this year for lavish items like the titanium fighter motorcyle for $110,000 featured in this year’s Christmas catalogue (pictured below), Neiman Marcus is getting rid of 375 employees, becoming the latest luxury retailer to slash its workforce.
WSJ: Reeling from the sharp drop in sales of luxury goods, upscale retailer Neiman Marcus Group Inc. is laying off 375 people, representing 3% of its work force.
The Dallas-based retailer, which operates 40 Neiman Marcus stores and New York luxury emporium Bergdorf Goodman, also said in a regulatory filing Tuesday that it will make interest payments for some senior notes due in 2015 by issuing more debt instead of paying cash — exercising a “payment-in-kind” option to cover interest payments due from Jan. 15 through April 14.
We’re not investment bankers, but that doesn’t sound like the wisest move.
“The affluent customer, unfortunately, doesn’t need anything. They can — and are — shopping in their closets and bragging about it to me,” [Neiman CEO Burt] Tansky said. “We are bracing ourselves for 2009 and 2010,” noting that “none of us knows what the customer will want going forward. We are in a transition period.”…
The layoffs — across all divisions of Neiman Marcus, including Bergdorf Goodman, catalogue and Internet divisions — illustrate how the current recession is dealing severe blows to some of the strongest names in the luxury goods industry. Last week, Neiman Marcus reported a 31.2% plunge in December sales at stores open at least a year, excluding its catalogue and online division. Its catalogue and Internet unit had a 9.2% drop in sales in the five weeks ended Jan. 3. Neiman Marcus’ current corporate family rating and probability of default rating stand at “B1,” four notches into noninvestment-grade status/
See Also: Chanel Cutting 200 Jobs
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