NEW YORK (Reuters) - Upscale department store Neiman Marcus posted an 84 percent drop in quarterly profit on Wednesday as its affluent shoppers cut spending in the face of sharp declines in the financial markets.
The results from Neiman, which also reported a 14.5 percent fall in quarterly same-store sales, came as a worrying reminder that shoppers across the board were guarding their wallets amid mounting job losses, tighter credit and the housing slump.
"We believe our most loyal customer still has the financial ability to shop with us; however the uncertainty that is prevalent in the economic landscape has caused her to pull back on the quantity of her purchases," Neiman Marcus Chief Executive Burt Tansky said during a conference call.
"We believe this customer will return to a more normal pattern of shopping as the economy improves," he added.
Other high-end retailers such as Tiffany & Co
Neiman's net profit was $12.9 million in the fiscal first quarter that ended Nov 1, down from $78.6 million in the year-earlier quarter.
On an operating basis, the company posted a profit of $81.6 million, compared with $189.7 million a year ago.
Sales fell to $986 million from $1.13 billion a year ago. Sales at stores open at least a year were down 14.5 percent.
The company said it expected aggressive promotional activity to continue to result in price markdowns and pressure profit margins in the near term.
Neiman, which was acquired by a private equity group in 2005, operates about 40 namesake stores across the United States and Bergdorf Goodman stores.
The company said it was not planning to close stores but added that major and minor remodel plans are on hold. Vacant positions are being held open and discretionary expenses such as travel and supplies are being cut, it added.
"We think '09 will continue to be a very difficult and very challenging year," Tansky said.
(Reporting by Aarthi Sivaraman with added reporting by Karen Jacobs in Atlanta, editing by Dave Zimmerman and Derek Caney)
