What: CEO Geoffroy van Raemdonck and CFO Katie Anderson addressed investors at the ICR Conference in Orlando.

Why it is important: NMG’s positive report on the state of its business comes despite other industry reports that the luxury sector is slowing in some cases amid the uncertain outlook on the economy.

“We have free cash flow that we can reinvest in our business, as well as generate more cash on a run rate basis,” added Katie Anderson, NMG’s executive vice president and chief financial officer. “We also make our profit from our core assets. A lot of companies in our industry make money from credit cards or off-price. That’s not us. We are profitable across our channels…We also have over a billion dollars of liquidity, which gives us a ton of flexibility.

Van Raemdonck did note that NMG, in its fiscal year which concluded July 31, 2022, generated $5 billion in gross merchandise value sales, an 11% earnings before interest, taxes, depreciation, and amortization margin rate, and $495 million in adjusted EBITDA. For the first quarter of the current fiscal year, NMG experienced a 6% comparable gain in GMV sales. Gross merchandise value refers to all the merchandise sold through NMG stores and websites, owned, on commission and through consignment. On a comparable basis, NMG was up 33% in sales, the company reported last October.

Van Raemdonck emphasized that profitability is sustained through successful efforts to generate greater full price selling; sales associates that build relationships with customers; operating three retail channels — stores, online and remote selling, and curating “with the right product assortment. We spend time curating brands, and ultimately we buy with our own money,” meaning wholesaling rather through leasing arrangements.

Van Raemdonck said NMG’s omni business model is “so tied to profitability,” adding, “If you take a customer who shops in a single channel online, they spend 1X. If we’re able to migrate them across channels, they spend 5X. And if we’re able to get them in a relationship with a sales associate, who curates assortments for them and experiences, they spend 12X.”

Furthering the case for profitability, van Raemdonck said NMG operates a “very clean, profitable and tight network of stores located where customers and high net worth individuals live. It’s 36 locations of Neiman Marcus and one for Bergdorf Goodman, and we exited off price, but for five liquidation stores. We are investing in our stores and we are investing $200 million of strategic [capital expenditure], half of which is funded by landlords, and that will touch half of our stores — our top 10 stores — and a third of the total fleet.

Neiman Marcus execs make the case for profitability