Neiman Marcus 2007 Annual Report Download - page 23

Table of Contents
• Sarasota, Florida in Fall 2010 (80,000 square feet planned);
• Walnut Creek, California in Fall 2010 (107,000 square feet planned);
• Princeton, New Jersey in Fall 2011 (90,000 square feet planned); and
• San Jose, California in Fall 2011 (120,000 square feet planned).
Bergdorf Goodman Stores. We operate two Bergdorf Goodman stores, both of which are located in Manhattan at 58th Street
and Fifth Avenue. The following table sets forth certain details regarding these stores:
Bergdorf Goodman Stores
Locations
Fiscal Year
Operations
Began
Gross Store
Sq. Feet
New York City (Main)(1) 1901 250,000
New York City (Men's)(1)* 1991 66,000
(1) Leased.
* Mortgaged to secure our senior secured credit facilities and the 2028 Debentures.
Clearance Centers. As of September 15, 2008, we operated 24 clearance centers that average approximately 27,700 square
feet each in size.
Distribution, support and office facilities. We own approximately 41 acres of land in Longview, Texas, where our primary
distribution facility is located. The Longview facility is the principal merchandise processing and distribution facility for Neiman
Marcus stores. We currently utilize a regional distribution facility in Dayton, New Jersey and five regional service centers in New
York, Florida, Texas and California. We also own approximately 50 acres of land in Irving, Texas, where our Direct Marketing
operating headquarters and distribution facility is located. In addition, we currently utilize another regional distribution facility in
Dallas, Texas to support our Direct Marketing operations.
Lease Terms. The terms of the leases for substantially all of our stores, assuming all outstanding renewal options are
exercised, range from 2 to 101 years. The lease on the Bergdorf Goodman Main Store expires in 2050, with no renewal options, and
the lease on the Bergdorf Goodman Men's Store expires in 2010, with two 10-year renewal options. Most leases provide for monthly
fixed rentals or contingent rentals based upon sales in excess of stated amounts and normally require us to pay real estate taxes,
insurance, common area maintenance costs and other occupancy costs.
For further information on our properties and lease obligations, see Item 7, "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and Note 14 of the Notes to Consolidated Financial Statements in Item 15.
ITEM 3. LEGAL PROCEEDINGS
We are currently involved in various legal actions and proceedings that arose in the ordinary course of our business. We
believe that any liability arising as a result of these actions and proceedings will not have a material adverse effect on our financial
position, results of operations or cash flows.
On April 21, 2008, we entered into an amendment to the Program Agreement, dated as of June 8, 2005, by and among NMG,
Bergdorf Goodman, Inc., (a wholly owned subsidiary of NMG), HSBC Bank Nevada, N.A. and HSBC Private Label Corporation
(formerly known as Household Corporation) (collectively referred to as HSBC). The amendment was entered into subsequent to the
filing of a lawsuit by the Company against HSBC alleging a breach of the Program Agreement, as well as other claims, and an
application for the granting of a temporary restraining order and other injunctive relief. The amendment, among other things, provides
for 1) the allocation between HSBC and NMG of additional income, if any, to be generated from the credit card program as a result of
certain changes made to the Program Agreement, 2) the allocation of certain credit card losses between HSBC and NMG (subject to a
contractual limit on the losses allocable to NMG) and 3) the dismissal of the lawsuit and temporary restraining order without
prejudice. We do not expect that the amendment will have a material impact on the level of our future income under the Program
Agreement.
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