Neiman Marcus 2012 Annual Report Download - page 6

Table of Contents
Leader in luxury online retailing with the largest assortment of luxury brands
We believe that we were one of the first major luxury fashion online retailers in the world, which positions us well as a leader in this evolving
channel. Our Online operation currently accounts for annual revenues of just over $1 billion, which we believe makes it one of the largest luxury, multi-
branded online platforms. This represents a compounded annual growth rate of approximately 15% since fiscal year 2010. We believe that our scale and
success allow us to provide our customers with an assortment of luxury merchandise online that is unmatched by other U.S. luxury and premium multi-
branded retailers. Furthermore, our online data analytics capabilities allow us to tailor our marketing and provide our customers with a highly personalized
shopping experience. At approximately 22% of our total revenues in fiscal year 2013, our online retailing operation represents a critical element of our omni-
channel strategy.
Leading portfolio of established and emerging luxury and fashion brands
As a leading fashion authority among luxury consumers, we carry many of the world’s most exclusive designers. We have highly skilled
merchandising teams for each of our brands, which enable us to optimize each channel and offer curated assortments that are customized at the store level
based on our extensive local market knowledge and online data analytics. As a result, we offer a broad selection of highly differentiated and distinctive luxury
merchandise to fully address our customers’ lifestyle needs. We have long-standing, 25+ year relationships with most of our largest vendors. In addition, we
also have a long history of identifying, developing and nurturing emerging design talent. We believe that these relationships with both established and emerging
designers allow us to obtain a better brand selection, including in some instances merchandise and brands that are exclusive to us, and superior allocation of
merchandise, providing our customers with a distinctive shopping experience.
Customer service led organization fosters strong customer relationships and loyalty and drives sales
We maintain superior customer service initiatives that enable us to engage with our customers and cultivate long-term relationships and customer
loyalty to increase sales.
InCircle Loyalty Program: We believe we were among the first retailers to adopt a customer loyalty program, and we believe that our InCircle loyalty
program helps drive incremental sales as our InCircle members visit our stores more frequently and spend significantly more than other customers.
Approximately 40% of our total revenues in fiscal year 2013 were generated by 143,000 InCircle members who achieved reward status. Our InCircle program
focuses on our most active customers to drive engagement, resulting in an increased number of transactions and sales by offering attractive member benefits
such as private in-store events, special exclusive offers, as well as the ability to earn gift cards.
Our Sales Associates: Our sales associates provide exceptional and differentiated customer service, instilling and reinforcing our culture of
relationship-based service recognized by our customers. Our commission-based sales associates have an average tenure of over seven years and are highly
productive. We have empowered our sales force with technology by rolling out to them approximately 7,000 smart phones and tablets, which further enhances
customer communication and engagement. Our emphasis is on building long-term customer relationships rather than transactional-based results, which has
led to consistently strong customer service scores.
Exceptional management team with world-class execution skills
Our senior leadership team has deep experience across a broad range of disciplines in the retail industry including sales, marketing, merchandising,
operations, logistics, information technology, e-commerce, real estate and finance. Karen Katz, our Director, President and Chief Executive Officer, joined
Neiman Marcus in 1985 and has been in charge of a variety of our business units, including leading both the Neiman Marcus Stores and Neiman Marcus
Direct businesses during her tenure. Ms. Katz’s strong and consistent leadership is complemented by a deep bench of executives with an average of 22 years of
experience in the retail industry, and an average of 11 years with us. James Skinner, our Executive Vice President, Chief Operating Officer and Chief
Financial Officer, brings over twenty years of retail experience to Neiman Marcus and has held multiple senior leadership positions with us since joining in
2000. James Gold, our President of Specialty Retail, joined us in 1991 and, prior to assuming his current role, was the Chief Executive Officer of Bergdorf
Goodman from May 2004 to October 2010. While many of our executives have deep rooted experience at Neiman Marcus in a variety of management positions,
we have also hired executives who bring fresh, outside perspectives and expertise to our organization. In June 2011, we hired John Koryl as the President of
Neiman Marcus Direct. Mr. Koryl brings six years of e-commerce experience at Williams-Sonoma and eBay. In May 2011, we hired Joshua Schulman as the
President of Bergdorf Goodman. Mr. Schulman was the Chief Executive Officer of Jimmy Choo for five years and held various senior executive roles at
Kenneth Cole, Gap and Gucci. Our management team has demonstrated a successful track record of delivering strong
4
®