Neiman Marcus 2013 Annual Report Download - page 12

Table of Contents
• the renovation of our main Bergdorf Goodman store on Fifth Avenue in New York City and Neiman Marcus stores in Bal Harbour, Florida,
Chicago, Illinois and Oak Brook, Illinois.
Currently, we project gross capital expenditures for fiscal year 2015 to be approximately $310 to $330 million. Net of developer contributions,
capital expenditures for fiscal year 2015 are projected to be approximately $275 to $295 million.
We receive allowances from developers related to the construction of our stores thereby reducing our cash investment in these stores. We received
construction allowances aggregating $5.7 million in fiscal year 2014, $7.2 million in fiscal year 2013 and $10.6 million in fiscal year 2012.
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The specialty retail industry is highly competitive and fragmented. We compete for customers with specialty retailers, luxury and premium multi-
branded retailers, national apparel chains, vendor-owned proprietary boutiques, individual specialty apparel stores and online retailers. We compete for
customers principally on the basis of quality and fashion, customer service, value, assortment and 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, Bloomingdale’s, Barneys New York, Net-a-Porter, vendor boutiques and other national, regional and local
retailers.
We believe we differ from other national retailers by our approach to omni-channel retailing, distinctive merchandise assortments, which we believe
are more upscale than other luxury and premium multi-branded retailers, excellent customer service, prime real estate locations, premier online websites and
elegant shopping environments. We believe we differentiate ourselves from regional and local luxury and premium retailers through our omni-channel
approach to business, strong national brand, diverse product selection, loyalty program, 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.
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As of September 19, 2014, we had approximately 16,500 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. Except for
certain employees of Bergdorf Goodman representing less than 1% of our total employees, none of our employees are subject to a collective bargaining
agreement. We believe that our relations with our employees are good.
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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.”
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We own certain tradenames and service marks, including the “Neiman Marcus” and “Bergdorf Goodman” marks, that are important to our overall
business strategy. These marks are valuable assets that consumers associate with luxury goods.
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The credit card operations that are conducted under our arrangements with Capital One are subject to 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. Any regulation or change in the regulation of credit arrangements that would materially limit the availability of credit to our customer base could
adversely affect our results of operations or financial condition.
Our practices, as well as those of our competitors, 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,
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