Neiman Marcus is embroiled in a dispute with many high-end luxury brands, including Gucci.
Since the swanky retailer emerged from bankruptcy last fall, The Post has learned that Neiman Marcus stores tend to be losing their hold on Gucci bags and other high-end items.
Six months after wiping out the majority of a crippling $5 billion debt load through Chapter 11, the Dallas-based luxury retailer is struggling to keep its stores stocked due to frayed relations with major fashion brands such as Gucci, sources told The Post.
According to insiders, the relationship with Gucci appears especially strained. The legendary Italian fashion house, which charges more than $300 for a pair of rubber slides, has been removed from the Neiman Marcus website. According to the web, only seven of its 37 locations now carry Gucci goods.
Prior to Neiman's bankruptcy filing last spring, sources told The Post, the majority of its stores sold Gucci's pricey wares. And competitor Saks Fifth Avenue continues to sell Gucci products in-store and online, including accessories and jewelry.
“The fact that Saks has all of the merchandise and Neiman's does not is indicative of [a] falling out,” one top industry source said, adding that the two chains' products are typically identical.
The apparent schism comes as Neiman Chief Executive Geoffroy van Raemdonck — who has amassed millions of dollars in compensation both before and after the bankruptcy — has been chastised by staffers for his tone-deaf approach to belt-tightening, flaunting his riches in a glossy magazine spread last fall as pink slips were being distributed.
It is not just workers who have been taken advantage of. Vendors resentful of unpaid bills have reportedly reduced their company with Neiman. According to company records, even companies that insure deliveries to Neiman are tightening their terms or suspending coverage.
Delayed supplier payments as a result of the bankruptcy "have limited, and will continue to limit, our ability to buy new inventory from some vendors," Neiman told investors in a confidential March 18 financial document obtained by The Post.
Meanwhile, firms that insure deliveries are "restricting or terminating coverage," Neiman said in a recent $1.1 billion debt offering paper.
Neiman said in a statement that it maintains close relations with its top vendors. “All of our brands enjoy excellent and long-standing relationships with us, and any insinuation to the contrary is categorically false. The business stated that it maintained all of its top 50 brands.
Gucci's parent company, French luxury goods conglomerate Kering, did not respond to requests for comment. Kering also owns Saint Laurent, Bottega Veneta, and Balenciaga.
The pandemic has been devastating for luxury retailers, and Neiman has not been immune. Moody's Investors Service recently put Neiman Marcus on its watch list for potential bankruptcy. Neiman Marcus's in-store revenues fell 34% in the six months ended Jan. 30, while online sales fell 6%, according to a confidential March 18 financial document obtained by The Post.
According to the company, it is seeing "double- and triple-digit increases in sales from our top luxury classes" compared to pre-COVID levels. However, in the investor presentation, it stated that quarterly revenues through March 15 were down compared to last year, though showing signs of improvement.
According to Neiman employees, sales are down partly due to a shortage of merchandise on shelves and in warehouses.
“The stores' primary concern is a lack of merchandise,” a Neiman employee told The Post. “We actually do not have the inventory we once did.”
“From the store's perspective, Louis Vuitton is a source of concern. The inventory is present, although it is not as extensive as it was previously. Or the range has dwindled and there are fewer options than in the past,” the employee, who requested anonymity, explained.
A second Neiman employee stated that Kering's non-Gucci luxury brands, such as Balenciaga and ready-to-wear, as well as Saint Laurent, are still available but have become more difficult to locate in stores and warehouses.
“I feel as if I'm in a no-win situation,” the sales representative said. “We must contact customers, but then discover that we are out of stock, either in store or in our warehouse.”
According to some outlets, van Raemdonck's massive cost-cutting has exacerbated the situation. Neiman admitted in the March 18 document that it has been losing talent, noting that "several executives have recently left the organization."
“We depend on our senior management's expertise, and their understanding of our business and industry would be difficult to replicate,” the document said. “The firm has lost many executives in recent years.”
According to news releases and business sources, about a dozen top executives have quit or been forced out over the last two years. Among them was former head of merchandising Jim Gold, a 29-year veteran who was succeeded as president and chief merchandising officer by Lana Todorovich in 2019.
According to some industry insiders, Todorovich — who previously worked for American fashion houses Ralph Lauren, Perry Ellis, and Calvin Klein — lacked the same connections to European luxury brands.
“Fashion is a partnership business,” a company source explained. “At the moment, Neiman Marcus has very little operational awareness. Almost all from the former regime has departed.'”
Gary Wassner, president and CEO of Hilldun Corp., which insures clothing shipments, reported that some of his clients are either supplying products to Neiman on a limited basis or with tighter payment terms.
“Everyone wants to see them do better now that they have emerged from Chapter 11,” he said.