Neiman Marcus Pulls Up China Stakes

Neiman Marcus is cutting back its presence in China. The luxury retailer, which never did open regular stores in mainland China, will now be closing its online fulfillment warehouse there and may be ending flash sales in the country, too, the Wall Street Journal reported.

Orders from the Chinese version of Neiman Marcus' website will now be fulfilled from U.S. warehouses and delivered through the international shipping service FiftyOne Global Ecommerce, which will also handle customs and other paperwork. The chain began international shipping last November.

The China pullout comes at a time when luxury retailers are beginning to struggle in China, but that probably hasn't had a big effect on Neiman, which partnered with a Chinese company to operate its website and run flash sales. What's more likely is that the chain is trying to cut any unnecessary costs as it's being prepared for a possible sale by its owners. Private equity firms TPG and Warburg Pincus bought Neiman in 2005, which means it's long past the usual five-year mark when it would have sold the 42-store chain.

What's not clear is what will happen with that Chinese partner, Glamour Sales. Neiman owns a 44 percent stake in the Chinese company, which now—with the warehouse closed—won't have a source for merchandise for its flash sales.

Glamour also runs the chain's e-commerce site, and there are advantages to having locals run an online store. But it's hard to say whether that advantage is worth Neiman owning almost half of Glamour. If Neiman really wants to slim down for a sale, the last of its China connections may be the next thing to go.

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