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UPDATE 1-Neiman Marcus posts bigger loss due to asset writedowns

Published 2016-09-26, 11:51 a/m
© Reuters.  UPDATE 1-Neiman Marcus posts bigger loss due to asset writedowns
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(Adds details from conference call, analyst comment)

Sept 26 (Reuters) - Neiman Marcus Group Ltd LLC NMRCUS.UL reported a bigger loss for the fourth quarter after the luxury fashion retailer wrote down the value of some of its assets as it struggles with falling sales.

Neiman Marcus, which also operates the Bergdorf Goodman stores, said its net loss widened to $407.25 million in the quarter ended July 30 from $32.88 million a year earlier.

The company had to take more markdowns during the quarter due to soft demand, hurting gross margin, Chief Executive Karen Katz said on a call on Monday.

Neiman Marcus said the non-cash impairment charge of $466.2 million, related to the writedown in fair value of goodwill, tradenames and certain assets, was taken following its annual review of the value of assets during the company's acquisition in 2013.

Neiman Marcus was acquired by Ares Management and Canadian Pension Plan Investment Board for $6 billion from private-equity firms TPG Capital and Warburg Pincus LLC.

The impairment charges highlight the erosion in Neiman Marcus's value over the past year, Neil Saunders, CEO of research firm Conlumino, said.

"This is a deterioration brought about by a steady decline in sales which has, in turn, weakened the company's growth prospects and has tarnished the commercial value of the Neiman Marcus brand name," he said.

The company said sales at established stores dropped 4.1 percent, falling for the fourth straight quarter. Total revenue declined 3.3 percent. pickup in tourist spending and demand for warm weather apparel had helped rivals Macy's Inc M.N , which runs the luxury Bloomingdale's chain, and Nordstrom Inc (NYSE:JWN) JWN.N to report smaller-than-expected drops in comparable sales for the quarter.

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