What: A rather long piece on the views from Marc Metrick and Geoffroy Van Raemdonck on the state of the market

Why it is important: While the US is a specific market, both companies are engaged in interesting experiments that are valuable to observe.

Neiman Marcus and Saks Fifth Avenue, two major players in the luxury retail sector, have undergone significant changes in recent years, including financial restructuring and adapting to new retail models.
Neiman Marcus filed for bankruptcy in 2020, emerging with a plan to shed $4 billion in debt and later refinancing an additional $1.1 billion. Under CEO Geoffroy van Raemdonck, the company has shifted focus from transactional to relationship-driven business, resulting in a solid balance sheet and strong liquidity. Investments have been made in the supply chain, a new distribution center, data capabilities for improved personalization, and a $200 million investment in store renovations.
Saks Fifth Avenue, in contrast, separated its e-commerce and brick-and-mortar operations in 2021. Its parent company, HBC, aimed to unlock value by establishing Saks.com as an independent entity. The online business experienced workforce reductions but maintained a headcount double that of pre-separation figures. Saks.com, led by CEO Marc Metrick, has remained profitable, unlike many digital-only retail businesses.
The luxury retail sector has been disrupted by e-commerce, challenging traditional in-person buying experiences. Both Neiman Marcus and Saks have focused on profitability, a key performance indicator. Neiman Marcus has seen growth by partnering with DTC brands seeking wholesale support and exclusive distribution deals. The company has also added new fashion brands and exclusive collections, emphasizing assortment curation over an endless aisle approach.
Luxury consumer behavior has been volatile and promotional, with increased expectations for discounts, especially online. Both retailers have navigated this environment by focusing on sales-assisted models and omnichannel strategies. Neiman Marcus, in particular, has concentrated on its top 2% of customers who drive significant sales. Additionally, the company has seen growth in its men's business and younger customer segments, while Saks has worked to develop its underrepresented men's segment.

Saks and Neiman Marcus CEOs exchange views on the evolution of the market