Luxury retailer Neiman Marcus has decided to pivot away from discount stores to focus more on its luxury customers, according to a report by The Wall Street Journal.
The retailer has plans to close over half of its Last Call discount stores. Other retailers, like Saks Fifth Avenue and Nordstrom, have been increasing their presence in the discount market, opening cheaper stores as a way to attract younger and more budget-conscious customers. Both companies now have more off-price stores than regular ones.
The market leader in the discount market is TJ Maxx, which opened 21 stores in 2019 for a total of 1,273. Right now, Neiman Marcus has 22 Last Call stores.
“We are different from our competitors,” said Neiman Marcus Chief Executive Geoffroy van Raemdonck. “Our strategy is to focus on the luxury customer and full-priced selling.” He added that about a fifth of the retailer’s customers purchase $50,000 of its merchandise per year. Aiming to focus more on those high-spending customers, Neiman Marcus is combining its in-store and online associates, and training salespeople to offer a higher level of service.
With the store closures, Neiman Marcus will let go of 250 non-selling associates, but said it will hire new employees as well.
Last Call was founded in 2017. The locations will be closed in the next eight months, resulting in the loss of about 500 jobs. The company is also shuttering two centers for distribution in Texas.
“This is not a pullback,” van Raemdonck said. “This is a move forward. We’ve got a strategy that is working. We want to put our effort behind the full-priced, luxury customer. This is what will differentiate us from the competition.”