Neiman Marcus 2010 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.
We operate in both the in-store and direct-to-consumer retail channels to provide our customers the ability to shop "any time,
anywhere and any place." We believe this omni-channel model maximizes the recognition of our brands and strengthens our customer
relationships. We are investing and plan to continue to invest resources to ensure a seamless shopping experience across channels
consistent with our customers' expectations as well as our core value of exceptional customer service. During fiscal years 2011, 2010
and 2009, we generated revenues of $4,002.3 million, $3,692.8 million and $3,643.3 million, respectively, and operating earnings
(loss) of $329.7 million, $231.8 million and $(652.9) million, respectively.
We currently 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. In addition, we operate 36 smaller format stores under the brands Last Call® and
CUSP®.
In connection with our omni-channel retailing model, our in-store operations are augmented by our direct-to-consumer
activities through which we operate e-commerce websites under the brands Neiman Marcus®, Bergdorf Goodman®, Horchow®, Last
Call® and CUSP®. We also produce catalogs under the Neiman Marcus and Horchow brands. Our well-established online and
catalog operation expands our reach beyond the trading area of our retail stores, as approximately 40% of our online and catalog
customers in fiscal years 2011 and 2010 were located outside of the trade areas of our existing retail locations.
We also use our e-commerce websites and catalogs 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 our online and
catalog direct selling efforts is the main reason that our omni-channel customers spend more on average than our single-channel
customers (approximately four times more in fiscal years 2011 and 2010).
A further description of the components of our integrated, omni-channel retailing model follows:
Specialty Retail Stores. Our specialty retail store operations (Specialty Retail Stores) consist primarily of our 41 Neiman
Marcus stores and two Bergdorf Goodman stores. We also operate 30 off-price stores under the Neiman Marcus Last Call brand.
Specialty Retail Stores accounted for 81.1% of our total revenues in fiscal year 2011, 81.5% in fiscal year 2010 and 82.1% in fiscal
year 2009.
• 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. We 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.
To supplement the operations of our Neiman Marcus stores, we operate 30 off-price stores under the Neiman Marcus
Last Call brand. These stores offer off-price goods purchased directly for resale as well as end-of-season clearance
goods from our Neiman Marcus stores, Bergdorf Goodman stores and direct-to-consumer operations. Based upon our
strategy to expand our off-price operations, we anticipate opening approximately four new Neiman Marcus Last Call
stores in fiscal year 2012. We also operate six 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.
Our Neiman Marcus stores (including Neiman Marcus Last Call and CUSP stores) accounted for 67.5% of our total
revenues in fiscal year 2011, 68.2% in fiscal year 2010 and 69.7% in fiscal year 2009 and 83.2% of Specialty Retail
Stores revenues in fiscal year 2011, 83.7% in fiscal year 2010 and 84.9% in fiscal year 2009. Sales from our Neiman
Marcus Last Call and CUSP stores accounted for less than 10% of our total revenues in each of those years.
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