#Neiman Marcus now offering no-interest payments on its pricey fashions

You’ve mortgaged the house and taken out a loan on the Toyota. Now, it’s time to finance that new Gucci bag.

Neiman Marcus plans to court shoppers with beer budgets and champagne tastes this holiday season — inviting them to scoop up high-priced fashions from designers like Chanel, Prada and Louis Vuitton with the help of flexible, no-interest payment plans.

The Dallas-based retailer, which emerged from Chapter 11 bankruptcy in late September, said Wednesday that it is partnering with a San Francisco-based financial tech company called Affirm to give shoppers the ability to stretch out their payments on its pricey merchandise for little to no extra cost.

With the new option, shoppers can pay for any purchase of more than $50 on a schedule ranging between six weeks and 36 months depending on the cart size for as little as zero-percent interest. A $995 pair of Manolo Blahnik pumps, for example, might cost $166 a month over six months.

Customers are shown the total cost of their purchase upfront and “will never pay more than they agree to,” Neiman said, adding that there will not be any late or hidden fees.

The deal comes as consumers have built up a trove of savings amid the pandemic as restaurants, movie theaters and other places they typically blow their cash have been shuttered. Now, Neiman is joining retailers from Walmart to Williams-Sonoma — both of which also happen to use Affirm’s service — in a grab for their dollars during the crucial Christmas season.

Handbags in particular could benefit from flex spending options, as big-ticket purchases seem more manageable under the plan, said Liz Dunn of Consumer Growth Partners, an industry consulting firm. On the other hand, she said, “apparel and luxury are really tough because we don’t have anywhere to go.”

While flex spending is a smart way to attract millennial shoppers, there are risks, Dunn added.

“Credit bubbles are really bad for consumers and ultimately they have negative repercussions for the economy,” she warned. “That’s the thin line companies are trying to walk. Are you providing a service or are you helping people buy things they can’t afford?”

For years, retailers like Home Shopping Network and QVC have built massive businesses by offering flex payments. Affirm said shoppers that use flex payments tend to spend more on average and come back to buy more often.

The tech company, which also works with Nordstrom and Peloton, noted that merchants using their service reported 85 percent higher average order values than on other payment options. In the first half of this year, Affirm said nearly 70 percent of its loans were from repeat customers.

The new payment option “allows us to reach customers who need payment flexibility and price transparency in the way they pay, but also increases our sales and average order value,” said Neiman Marcus chief digital officer Katie Mullen.