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Luxe's Winning Strategy: Neiman Marcus Profits Climb 19.3% in Quarter

Neiman Marcus Group saw second-quarter profits rise 19 percent to $70.6 million, as sales gained 7.7 percent to $1.13 billion from $1.05 billion.

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For now, Neiman’s is keeping busy opening new stores, with units coming in San Antonio, Tex., and Boca Raton, Fla., this year. In fall 2006, the company is set to open in Charlotte, N.C., and Austin, Tex. The company also plans to open a store in a western suburb of Boston in 2007.

As for the direct-marketing operation, the company plans more designer boutiques on its Web site. Referred to as sitelets, the company already operates two, Ferragamo and David Yurman. The purpose of increasing the sitelets is to provide advertising for both Neiman Marcus and its vendor partners, Tansky said.

Tansky didn’t say much about the company’s smaller-brand segments. Laura Mercier has “improved this quarter,” while Kate Spade is focused on expanding the brand through new licensing opportunities, he explained. The Kate Spade operation had distribution issues in the quarter, which negatively impacted quarterly results, Tansky told analysts, but added that management at Kate Spade believed they’ve resolved the issues. He added that so far there’s been “positive response to spring merchandise.”

“We are off to a great start,” said Tansky, who one flattering analyst noted on the call should be called “Mr. Luxury.”
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