Geoffroy van Raemdonck, CEO of Neiman Marcus Group, joined Cheddar News to discuss how demand for luxury goods remains strong as it enters a new fiscal year despite inflation.

Geoffroy van Raemdonck, CEO of Neiman Marcus Group, joined Cheddar News to discuss how demand for luxury goods remains strong as it enters a new fiscal year despite inflation. After reporting its strongest annual results in several years, Neiman Marcus is expanding online sales and van Raemdonck said he's "very cautiously optimistic" ahead of the holiday season.

 Neiman Marcus CEO "Very Cautiously Optimistic" For Holiday Season Despite Inflation

come back to closing balance cheddar news, everyone Neiman Marcus Group, the parent company of Neiman Marcus and Bergdorf Goodman reporting some strong fiscal year, 2022 results showing a 30% jump in comparable sales from 2021 and it's top 2% of customers drove about 40% of overall sales, pointing to resiliency in the luxury retail space, even in uncertain economic times. Well, joining me now is Jeff Uav and Ram Dong's Ceo of Neiman Marcus group. Jeff wa, thank you so much for joining me this afternoon. Break down what worked for your company this past year. Hi christian pleasure being with you today. Well what worked with us is really building a relationship with customers and delighting customers in the categories that they like the most, we have 3006 associated in our stores at Bergdorf Goodman and Neiman markers, 1000 of them sell more than a million dollars, which shows you the depth of their relationship and I think that's been a key anchor to the success of this year, is having our sales associate really catered to the customer, give them inspiration of what they should buy and giving them confidence in stretching in their fashion tastes. And then we equally have partnerships and strong relationship with the top luxury brands and those top 20 luxury brands for us grew 70% compared to pre Covid And they've done unique things for us. 2 3rd of them do activation exclusive, offering early launches and we've increased the distribution of those brands by 600 points of distribution, getting closer to the customer, giving them more choices in each destination that we have a location and then making sure that the brands have access to those very loyal Neiman, Marcus and Bergdorf Goodman customers. Do you expect Jeff wa that this demand will continue at the same pace, accelerate, decelerate in the year ahead given the current economic environment. So we recognize that it is an a volatile environment. We're not immune to change us. But right now the numbers that we reported are reported until the end of July 2022. If I look at the first quarter of our fiscal year, we are performing at mid to high single digit compared to the prior year and that is growth on really strong growth. So I'm encouraged by the performance we have right now. It's difficult to predict what the holidays will be but I do believe that there's a couple of things that are worth mentioning. One is we've increased the number of customers who shop with us over the last year. Those customers have more savings and they're coming back to the normal life which is traveling, going to work social life. And I think that's combined with the relationship that I described with our sales associate and the relationship they have with our brands. I think that gives me confidence that we are resilient and prepared. That said, we are always very agile. We look at what are the opportunities we have to get more inventory. Where are we exposed too much an inventory. And we keep investing in our business. But we do it with the maximum flexibility in our P and L How is business investment changing this year, Jeff again, given the current state of the economy as you do look to expand. So we're really focusing on experiences, the customer wants experience and unique experiences and that's true digitally. So you'll see we just relaunched or nm app and it has a lot of opportunities for the customers to shop but also to get inspired to book services in stores to connect with their sales associates. So it's all about that relationship digitally. But also the relationship in store. You see over the holidays, we've made enormous investments in events. We've made investment in unique products And we are extending the reach of the categories with a lot of epic your food at the demon markers. Holiday book is being launched at the end of this month And it features 600 unique products and then incredible fantasy gifts which we are known for. How has the share the market share, Jeff watch changed from that in store experience to online sales. What's the divide now in terms of the business that you see coming from online versus in store. So first we do a third of our sales online and a third of us, 2000 our sales in the stores. I would say that a big part of our sales in stores will happen when the customer is not in the store. We actually have a third channel which we could remote selling, which is our sales associate engaging with the customer when the customer is not in the store. And that's that very strong client telling. And successfully. We've been able to sell small items but also pieces of jewelry that are a part of $1 million dollars through that remote selling. What what we're seeing right now is really a performance that is pretty even between the channels because we are able to grow and attract customers and drive frequency through digital region. That's our availability 24/7. But we are also seeing a real desire from customers and especially the younger customers to have a physical experience to see the product to have and participate in one of our 43 restaurants or bars to get a spa treatment or to get alteration services. And I think the magic of post Covid being in a physical place with other people who create inspiration and delight is really the balance. And so we're not seeing that one of the channel is stronger than the other one. And we're quite agnostic because for us, being an integrated retailer who provide services across those channels is really omission. We're not favoring one channel over another one. So Jeff what you're still gonna be offering that same supersized holiday experience of course, as you were laying out there that I know, Neiman Marcus fans have always for years. Really loved when it comes to holiday sales in particular. What kind of vision do you have for that? Do you think holiday sales will be stronger this year than last year? I think it's, it's going to be a congruence of a lot of things. I do think that this year there's a lot of customers who are going into the holidays with the confidence that they'll be able to plan a trip for the holidays that they'll be able to socialize and really celebrate the holidays with their loved ones. And that comes with self purchase, but also gifting. And then we also recognizing that there's some customers who in the last year where moving some of their disposable income in luxury and fashion and this year may choose to need or may need to spread it across a wider array of, of options. But I do think that the holiday in a relationship business with uh, the unique offering we have and we do have all those incredible gifts, the dinners and breakfast with santa. I feel very cautiously optimistic about the holiday with our customers and I know that the brands have really prepared a series of exclusive offerings with us and unique events which we are kicking off this month, going into the holidays with this strong holiday, celebratory spirit, Jeff. What I want to go back to a staff that I mentioned at the start of our segment together, 40% of sales driven by your top 2% of customers. Absolutely incredible! Top 2% of customers as we see on our screen, they're driving 40% of sales. What were these customers buying? So they were buying a little bit of everything. But if you compare them pre covid, they really bought a lot into women's shoes, women handbags and then there were a lot of men who entered the category and really grew with us. Jury is always important and really did very well last year this year, which again are year started in august, we continue to see the strength in shoes in men, but we've also seen and that's literally more recently started in the spring growth in women's ready to wear and that is the contemporary and the designer because women are going back to celebrating their social lives traveling, going back to work. And so that is a lot of what these customers about and I think they're going to, we're seeing the frequency increase because their desire for fashion as they can wear it more often is really increasing, Jeff waugh, fascinating. I like the celebration. I like the celebratory mood as you're describing there of your clientele, cautiously optimistic into the holidays, Jeff wav on room Dong ceo of Neiman Marcus group. Thank you