Neiman Marcus 2004 Annual Report Download - page 13

presentation of merchandise, marketing and customer loyalty programs and, in the case of Neiman Marcus and Bergdorf Goodman, store ambiance. Retailers
that compete with us for distribution of luxury fashion brands include Saks Fifth Avenue, Nordstrom, Barney's New York and other national, regional and
local retailers.
We believe we are differentiated from other national retailers by our distinctive merchandise assortment, which we believe is more upscale than other
high-end department stores, excellent customer service, prime real estate locations and elegant shopping environment. We believe we differentiate ourselves
from regional and local high-end luxury retailers through our diverse product selection, strong national brand, loyalty programs, customer service, prime
shopping locations and strong vendor relationships that allow us to offer the top merchandise from each vendor. Vendor-owned proprietary boutiques and
specialty stores carry a much smaller selection of brands and merchandise, lack the overall shopping experience we provide and have a limited number of
retail locations.
Employees
As of September 2, 2005, we had approximately 16,100 employees. Neiman Marcus stores had approximately 13,500 employees, Bergdorf Goodman
stores had approximately 1,000 employees, Neiman Marcus Direct had approximately 1,500 employees and Neiman Marcus Group had approximately 90
employees. Our staffing requirements fluctuate during the year as a result of the seasonality of the retail industry. We hire additional temporary associates and
increase the hours of part-time employees during seasonal peak selling periods. None of our employees are subject to collective bargaining agreements, except
for approximately 15% of the Bergdorf Goodman employees. We believe that our relations with our employees are good.
Seasonality
Our business, like that of most retailers, is affected by seasonal fluctuations in customer demand, product offerings and working capital expenditures. For
additional information on seasonality, see Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations—Executive
Overview—Seasonality."
Regulation
Our operations are affected by numerous federal and state laws that impose disclosure and other requirements upon the origination, servicing and
enforcement of credit accounts and limitations on the maximum amount of finance charges that may be charged by a credit provider. In addition to our
proprietary credit cards, credit to our customers is also provided primarily through third parties such as American Express, Visa and MasterCard. Any change
in the regulation of credit that would materially limit the availability of credit to our customer base could adversely affect our results of operations or financial
condition.
Our and our competitors' practices are subject to review in the ordinary course of business by the Federal Trade Commission and are subject to numerous
federal and state laws. Additionally, we are subject to certain customs, truth-in-advertising and other laws, including consumer protection regulations that
regulate retailers generally and/or govern the importation, promotion and sale of merchandise. We undertake to monitor changes in these laws and believe that
we are in material compliance with all applicable state and federal regulations with respect to such practices.
Investments in Brand Development Companies
Our Brand Development Companies consist of our 56% interest in Kate Spade LLC, which designs and retails high-end designer handbags and
accessories, and our 51% interest in Gurwitch
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