Customers spending more than $10K a year account for nearly half of Neiman Marcus sales: CEO

Neiman Marcus Group CEO Geoffroy van Raemdonck noted on Monday that recent market volatility has not impacted sales so far as the company continues to see healthy growth. 

Markets have been experiencing volatility in recent weeks as concerns over Federal Reserve rate hikes amid high inflation continue to worry investors.

Ticker	Security	Last	Change	Change %
I:DJI	DOW JONES AVERAGES	44782	-128.65	-0.29%
SP500	S&P 500	6047.15	+14.77	+0.24%
I:COMP	NASDAQ COMPOSITE INDEX	19403.947849	+185.78	+0.97%

Fed officials have indicated that the central bank would likely raise rates by another 75-basis points at its upcoming meeting this week as a way to try to tame inflation, which currently sits at 40-year highs. 

"We see the volatility and the volatility existing across all sectors, including retail," van Raemdonck told "Cavuto: Coast to Coast" on Monday. "Right now, we’re not seeing this translating into our sales and we continue to see healthy growth." 

WHY IS INFLATION STILL SO HIGH, AND WHEN WILL IT START TO COOL?

"Historically, what’s really impacted luxury is big drop in our price, big drop in the market and that’s usually what drives the change in behavior," he continued. 

Van Raemdonck noted that customers who spend more than $10,000 a year account for almost half of the company’s sales despite economic headwinds, including high inflation. 

"They are very loyal to us and very engaged in luxury," he said.   

U.S. consumer confidence increased slightly in July, surprising economists who had forecasted another decline as inflation continues to rage after sentiment reached the lowest point on record in June.

The University of Michigan's consumer sentiment index released earlier this month rose to 51.1 this month, up from a record low of 50 in June. Economists polled by Refinitiv had expected a July reading of 49.9. For perspective, the index was at 81.2 a year ago.

Inflation reached a new 40-year high of 9.1% in June, and the persistence of price increases continues to pummel Americans' budgets. Still, the Neiman Marcus CEO noted that his customers have remained resilient. 

Van Raemdonck noted that his sales are up 30% compared to pre-COVID levels in the last quarter and that sales of the company’s top 20 brands are up 70%. 

He attributed the bump to the company’s "differentiated business model," where customers can engage with 3,000 sales associates in stores, online and in a remote setting. 

He noted that there has been strong demand for luxury shoes and handbags as well as a "massive acceleration" in mens items, which he pointed out increased 60% compared to pre-COVID levels. 

Retail sales also rose last month, in part propelled by increased spending on gas, which hit a record high topping $5 mid-month. Prices have since subsided and average around $4.58, according to AAA.

Van Raemdonck argued that "the market has expanded" and pointed to a couple of statistics. 

"If we look at the customers who spend more than $10,000 with us per year, the one we recruited post-COVID is six years younger than the one we had pre-COVID, which indicates that a younger generation is really significantly engaging in luxury," he noted. 

CLICK HERE TO READ MORE ON FOX BUSINESS

"And then we are also seeing new customers are spending in their first transaction somewhere around 20% more than pre-COVID [levels] and so I think they are really coming to the luxury providers and focusing on the luxury brands that we offer." 

FOX Business’ Breck Dumas and Megan Henney contributed to this report.