Question

The majority of the articles you will find blame debt. This may contribute, but there are other reasons why Neiman Marcus hit rock bottom. Do some research on the stores, the prices, the offerings and the services they offer. Did they have the characteristics that were selected in by this environment? What characteristics were strong points? What characteristics were weak points?

Is it too late for Neiman Marcus? Can they change their characteristics to be more isomorphic with their environment?

In the middle of the COVID-19 crisis Neiman Marcus sent an email touting their sale on women's high-fashion dresses. The 40% off took some $5000 dress down to $3000. Is this a smart move? Does this show that they are out of touch?

Answer 1

Answer:

Neiman Marcus has hit the bottom mainly because of the long term over standing debt on the business and changes in the consumer preferences which the store failed to adapt to and ultimately it has filed for bankruptcy. Its position has been further weakened by the impact of COVID 19 pandemic which has brought down its sales further and ultimately the business had gone down leading to the higher amount of loss.

The characteristics of the business that acted as its strong point was that pre covid, the business has started to regain its revenues as a result of increased sales despite of heavier debts.

The characteristics of the business that acted as its weak point is that they failed to adapt themselves according to the changes in the customer preferences. Moreover, post covid, even when they have opened their stores, they experienced a heavy fall in the demand from the customers.

Still it is not too late for Neiman Marcus. They can conduct the market research for analysing the demand of the customers and on the basis of this research; they can change their strategies and align the business so as to satisfy the demand of the customers. They need to quickly get adapted to the changing consumer environment and should respond quickly to the changes in the customer preferences.

Providing such a high discount over the dresses that are no longer in trend is a smart move rather than discarding these dresses. However, such move by the business creates a habit among the customers for such kind of discounts which they expect during their next visits and it may not be possible for the store every time to offer such a huge discount.