Saks has decided to close Neiman Marcus’ Dallas headquarters office in a cost-saving move, the Dallas Morning News reported. It wasn’t unexpected after privately-owned HBC closed the $2.7 billion Saks-Neiman Marcus Group merger under Saks Global late last year.
In more cost-cutting news, Saks will also close its Bryant Park office in New York City and bring employees back to Saks uptown headquarters. This comes after laying off some 100 Saks employees last year in preparation for the merger.
So far no layoffs at Neiman Marcus have been announced with headquarters employees expected to work from home, but one wonders how long they will still be on the payroll.
Rumors have been swirling for some time that Saks was in trouble, and vendors have not been paid. Those rumors were confirmed last Friday when Saks Global CEO Marc Metrick sent a memo to vendors saying they’ll have to wait until July to receive the first of 12 installments for over-due bills, though he reassured vendors that they would receive payment for new orders within 90 days of receipt, according to the Wall Street Journal. That’s small consolation, given that retailers typically pay for merchandise within 60 days.
Given its current financial challenges, it feels like HBC may have bit off more than it could chew after it had to turn to the junk bond market to close the Neiman Marcus merger deal.
In something of an understatement, GlobalData managing director of retail Neil Saunders shared with me, “Behind closed doors, there appear to be issues at Saks. They seem to be hit harder by the luxury slowdown than some rival chains.” And that’s not all their issues.
New research from Placer.ai just emerged that shows how weak Saks is compared to Neiman Marcus and its two rivals in the luxury department store business, Bloomingdale’s and Nordstrom.
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