Neiman Marcus posts 2Q loss on write-downs

Luxury merchant Neiman Marcus Inc. posted a fiscal second-quarter loss Wednesday on a series of hefty write-downs totaling more than half a billion dollars. The results were also hurt by a dramatic pullback in spending among its wealthy customers.

The privately held company, based in Dallas, said it lost $509.3 million for the quarter ended Jan. 31. That's compared with a profit of $44.3 million in the same quarter last year. Quarterly revenue fell 21 percent to $1.08 billion from $1.37 billion.

The results were hurt by several one-time charges, including write-downs on trade names, goodwill and other assets. Those charges totaled $560.1 million during the quarter.

Adjusting for those items and for other expenses, the company said it earned $24.6 million compared with $187.3 million last year.

Luxury sellers like Neiman Marcus have been among the hardest hit retailers as they were caught by the sudden retreat of shoppers who had been willing to pay prices like $900 for designer shoes and $5,000 for handbags. The sudden reversal forced Neiman Marcus and other stores to offer unprecedented discounts on coveted brands during the holiday season to try to pull in shoppers.

Rival Saks Inc., which operates Saks Fifth Avenue, last month reported a loss for the fourth quarter and issued a downbeat sales forecast.

To preserve cash, Neiman Marcus and Saks are taking steps to cut costs. Neiman Marcus said in January that it's cutting approximately 375 jobs, or nearly 3 percent of its work force.

Last week, Neiman Marcus said same-store sales declined 20.9 percent in February. Same-store sales are sales at stores open at least a year and are considered a key indicator of a retailer's health.