Neiman Marcus 2004 Annual Report Download - page 9

operation expands our reach beyond the trading area of our retail stores, as approximately 50% of our Direct Marketing customers in 2005 were located
outside of the trade areas of our existing retail locations. We also use our catalogs and e-commerce websites as selling and marketing tools to increase the
visibility and exposure of our brand and generate customer traffic within our retail stores. We believe the combination of our retail stores and direct selling
efforts is the main reason that our multi-channel customers spend more on average than our single-channel customers (approximately 3.5 times more in 2005).
Merchandise
Our percentages of revenues (exclusive of revenues generated by leased departments) by major merchandise category are as follows:
Years Ended
July 30,
2005
July 31,
2004
August 2,
2003
Women's Apparel 34% 34% 34%
Women's Shoes, Handbags and Accessories 19% 19% 16%
Cosmetics and Fragrances 12% 12% 12%
Men's Apparel and Shoes 12% 11% 12%
Designer and Precious Jewelry 10% 10% 10%
Home Furnishings and Décor 9% 10% 11%
Other 4% 4% 5%
100% 100% 100%
Substantially all of our merchandise is delivered to us by our vendors as finished goods and is manufactured in numerous locations including Europe and
the United States, and to a lesser extent, China, Mexico and South America.
We lease certain departments in our stores to independent companies. Our management regularly evaluates the performance of the leased departments
and requires compliance with established guidelines. The companies to which we lease store space are generally responsible for paying their own employees.
We receive commissions from these leased departments on a percent of sales basis.
Our merchandise consists primarily of apparel and accessories from luxury-branded designers. Our major merchandise categories are as follows:
Women's Apparel: Women's apparel consists of dresses, eveningwear, suits, coats, and sportswear separates—skirts, pants, blouses, jackets, and
sweaters. Women's apparel occupies the largest amount of square footage within our stores. We work with women's apparel vendors to present the
merchandise and highlight the best of the vendor's product. Our primary women's apparel vendors include Chanel, St. John, Giorgio Armani, Theory, Escada
and Ellen Tracy.
Women's Shoes, Handbags and Accessories: These categories make up approximately 19% of our revenues. Women's accessories include belts, gloves,
scarves, hats and sunglasses. Our primary vendors in this category include Manolo Blahnik, Prada, Gucci, Chanel, Dior and Ferragamo in Ladies Shoes; and
handbags from Chanel, Prada, Gucci, Marc Jacobs, Judith Leiber and Luella Bartley.
Cosmetics and Fragrances: Cosmetics and fragrances include facial and skin cosmetics, skin therapy and lotions, soaps, fragrance, candles and beauty
accessories. Our primary vendors of cosmetics and beauty products include La Mer, Bobbie Brown, Sisley, La Prairie, Chanel and Laura Mercier.
Men's Apparel and Shoes: Men's apparel and shoes include suits, dress shirts and ties, sport coats, jackets, trousers, casual wear and eveningwear as
well as business and casual footwear. This category
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