Neiman Marcus 2009 Annual Report Download - page 5

Table of Contents
PART I
ITEM 1. BUSINESS
Business Overview
We are one of the nation's leading luxury retailers, offering distinctive merchandise and excellent customer service that cater
to the needs of the affluent consumer. Since our founding in the early 1900s, we have established ourselves as a leading fashion
authority among luxury consumers and have become a premier U.S. retail channel for many of the world's most exclusive designers.
Currently, we operate 41 Neiman Marcus full-line stores at prime retail locations in major U.S. markets and two Bergdorf Goodman
stores on Fifth Avenue in New York City. We also operate catalogs and e-commerce websites under the brands Neiman Marcus®,
Bergdorf Goodman® and Horchow®. During fiscal years 2010, 2009 and 2008, we generated revenues of $3,692.8 million, $3,643.3
million and $4,600.5 million, respectively, and operating earnings (loss) of $231.8 million, $(652.9) million and $466.4 million,
respectively.
We operate an integrated, multi-channel retailing model as described below:
Specialty Retail. Our specialty retail store operations (Specialty Retail) consist primarily of our 41 Neiman Marcus stores
and two Bergdorf Goodman stores. Specialty Retail accounted for 81.5% of our total revenues in fiscal year 2010, 82.1% in fiscal
year 2009 and 83.8% in fiscal year 2008.
• Neiman Marcus Stores. Neiman Marcus stores offer distinctive luxury merchandise, including women's couture and
designer apparel, contemporary sportswear, handbags, fashion accessories, shoes, cosmetics, men's clothing and
furnishings, precious and designer jewelry, decorative home accessories, fine china, crystal and silver, children's apparel
and gift items. We locate our Neiman Marcus stores at carefully selected venues in major metropolitan markets across
the United States and design our stores to provide a feeling of residential luxury by blending art and architectural details
from the communities in which our stores are located.
We also operate 28 off-price stores under the Neiman Marcus Last Call brand. These off-price stores offer end-of-
season clearance goods from our Neiman Marcus stores, Bergdorf Goodman stores and direct-to-consumer operations,
as well as off-price goods purchased directly for resale by our Neiman Marcus Last Call stores. Based upon our strategy
to expand our off-price operations, we anticipate opening approximately three to five new Neiman Marcus Last Call
stores annually in each of the next three fiscal years.
Our full-line Neiman Marcus stores and Neiman Marcus Last Call stores accounted for 68.2% of our total revenues in
fiscal year 2010, 69.7% in fiscal year 2009 and 71.2% in fiscal year 2008 and 83.7% of Specialty Retail revenues in
fiscal year 2010, 84.9% in fiscal year 2009 and 85.0% in fiscal year 2008.
• Bergdorf Goodman Stores. Bergdorf Goodman is a premier luxury retailer in New York City well known for its couture
merchandise, opulent shopping environment and landmark Fifth Avenue locations. Bergdorf Goodman features high-
end apparel, fashion accessories, shoes, decorative home accessories, precious and designer jewelry, cosmetics and gift
items. Our Bergdorf Goodman stores accounted for 13.3% of our total revenues in fiscal year 2010, 12.4% in fiscal year
2009 and 12.6% in fiscal year 2008 and 16.3% of Specialty Retail revenues in fiscal year 2010, 15.1% in fiscal year
2009 and 15.0% in fiscal year 2008.
We currently operate 6 stores under the CUSP name. CUSP is a smaller store format (6,000 to 11,000 square feet) that
targets a younger, fashion savvy customer with a contemporary point of view. To date, the operations of the CUSP stores are
insignificant to the revenues and operating earnings of our Specialty Retail stores.
Direct Marketing. Our upscale direct-to-consumer operation (Direct Marketing) conducts online and catalog sales of fashion
apparel, accessories and home furnishings through the Neiman Marcus brand, online and catalog sales of home furnishings and
accessories through the Horchow brand, and online sales of fashion apparel and accessories through the Bergdorf Goodman brand.
We anticipate the launch of a website under the Neiman Marcus Last Call brand in the first quarter of fiscal year 2011. The Neiman
Marcus Last Call website will feature off-price fashion goods and will augment and complement the operations of our Neiman Marcus
Last Call stores.
In addition, Direct Marketing currently operates five designer websites. In connection with the designer websites, Direct
Marketing creates and/or maintains separate e-commerce sites bearing the designers' brand names. Direct Marketing maintains
inventory from each designer to be showcased on that designer's website and bears all the responsibilities related
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