A Bloomberg.com story last week said that many luxury retailers were caught with large overstock inventories last holiday season – and, as a result, are “trying to avoid repeating markdowns of as much as 70 percent.”
So far this year, the upscale department stores have seen unheard of revenue declines. During third quarter Saks had a net loss of $54.5 million and Neiman Marcus saw revenue decline by $168.5 million.
In a move to cut losses, Saks and Nordstrom Inc. have “leaned” their inventories, in some cases frustrating shoppers used to a broader selection.
Even online shopping was off 18 percent for the 12 months ending August 31 at Saks, and second-quarter sales dropped 15 percent. Bloomberg also reported that Neiman Marcus saw a 17 percent drop in sales, 12 percent at Saks and Nordstrom reported a 2.4 percent drop.
As a result, December 26 shoppers looking for discounted goodies may be disappointed by the skimpy post-holiday selection.
Analysts predict continued low luxury inventories. Neiman Marcus in Dallas, for example, reduced merchandise orders 20 percent to 30 percent in line with sales declines the company announced in a September conference call.