In a move that emphasizes the ways in which it differs from competitors, Neiman Marcus is closing about half of its remaining Last Call stores, discount options that have provided lower cost access to previous seasons’ styles or overstocked luxury fashions. The closure wave actually started a few years ago, when Neiman Marcus rid itself of about one-quarter of the discount stores. It currently maintains just 22 Last Call outlets, but even that appears to be too many to the retailer’s owners.

Noting that luxury buyers represent its primary market, it believes that full-priced sales of high end fashion is where it should focus all its attention. Accordingly, it plans to offer even more training to its professional sales representatives, encouraging them to interact more broadly with customers, both online and in stores. It also will hire more personnel to provide this superior service in its conventional stores, even as an estimated 500 people will lose their jobs once the Last Call stores shutter their doors.

At the same time that Neiman Marcus moves away from its discount operations though, other high end retailers like Saks Fifth Avenue and Nordstrom are expanding theirs. Both of these chains now have more discount stores than conventional retail stores, reflecting their efforts to appeal to a wider audience and attract younger shoppers who might become loyal customers in the future.

But that is not Neiman Marcus’s stated goal. It prioritizes and serves luxury consumers, exclusively and purposefully. To do so, it aims to avoid being distracted by running a discount arm too.

Discussion Questions:

1. What differentiates Neiman Marcus from competitors like Nordstrom?
2. How does this recent move reinforce that differentiation?

Source: Suzanne Kapner, “Neiman Marcus Backs Away from Discount Business,” The Wall Street Journal, March 11, 2020