Neiman Marcus 2012 Annual Report Download - page 11

Table of Contents
Our major merchandise categories are as follows:
Women’s Apparel: Women’s apparel consists of dresses, eveningwear, suits, coats and sportswear separates—skirts, pants, blouses, jackets and
sweaters. We work with women’s apparel vendors to present the merchandise and highlight the best of the vendor’s product. Our primary women’s apparel
vendors include Chanel, Gucci, Prada, Giorgio Armani, St. John, Akris and Brunello Cucinelli.
Women’s Shoes, Handbags and Accessories: Women’s accessories include belts, gloves, scarves, hats and sunglasses and complement our shoes
and handbags assortments. Our primary vendors in this category include Christian Louboutin, Chanel, Manolo Blahnik, Prada, Gucci, Jimmy Choo and
Tory Burch in ladies shoes and Chanel, Prada, Gucci, Tory Burch, Balenciaga and Celine in handbags.
Men’s Apparel and Shoes: Men’s apparel and shoes include suits, dress shirts and ties, sport coats, jackets, trousers, casual wear and
eveningwear as well as business and casual footwear. Bergdorf Goodman has a fully dedicated men’s store on Fifth Avenue in New York. Our primary
vendors in this category include Ermenegildo Zegna, Brioni, Giorgio Armani, Tom Ford, Brunello Cucinelli and Loro Piana in men’s clothing and sportswear
and Ermenegildo Zegna, Brioni, Prada, Ferragamo, Gucci and Tom Ford in men’s furnishings and shoes.
Designer and Precious Jewelry: Our designer and precious jewelry offering includes women’s necklaces, bracelets, rings, earrings and watches
that are selected to complement our apparel merchandise offering. Our primary vendors in this category include David Yurman, John Hardy and Ippolita in
designer jewelry and Roberto Coin and Van Cleef & Arpels in precious jewelry. We often sell precious jewelry that has been consigned to us from the vendor.
Cosmetics and Fragrances: Cosmetics and fragrances include facial and skin cosmetics, skin therapy and lotions, soaps, fragrances, candles
and beauty accessories. Our primary vendors of cosmetics and beauty products include La Mer, Chanel, Sisley, Bobbi Brown, La Prairie, Estee Lauder and
Laura Mercier.
Home Furnishings and Décor: Home furnishings and décor include linens, tabletop, kitchen accessories, furniture, rugs, decorative items
(frames, candlesticks, vases and sculptures) as well as collectables. Merchandise for the home complements our apparel offering in terms of quality and
design. Our primary vendors in this category include Jay Strongwater, MacKenzie-Childs and Lalique.
Vendor Relationships
Our merchandise assortment consists of a broad selection of highly differentiated and distinctive luxury goods purchased from both well-known
luxury-branded fashion vendors as well as new and emerging designers. We communicate with our vendors frequently, providing feedback on current demand
for their products, suggesting changes to specific product categories or items and gaining insight into their future fashion direction. Certain designers sell their
merchandise, or certain of their design collections, exclusively to us and other designers sell to us pursuant to their limited distribution policies. Our
relationships and purchasing power with designers allow us to obtain a broad selection of quality merchandise. Our women’s and men’s apparel and fashion
accessories businesses are especially dependent upon our relationships with these designer resources. We monitor and evaluate the sales and profitability
performance of each vendor and adjust our future purchasing decisions from time to time based upon the results of this analysis. We have no guaranteed
supply arrangements with our principal merchandising sources. In addition, our vendor base is diverse, with only one vendor representing more than 5% of
the cost of our total purchases in fiscal year 2013. This vendor represented 6.6% of our total purchases in fiscal year 2013. The breadth of our sourcing helps
mitigate risks associated with a single brand or designer.
Consistent with industry business practice, we receive allowances from certain of our vendors in support of the merchandise we purchase for resale.
We also receive advertising allowances from certain of our merchandise vendors, substantially all of which represent reimbursements of direct, specified and
incremental costs we incur to promote the vendors’ merchandise. In addition, we receive allowances from certain merchandise vendors in conjunction with
compensation allowances for employees who sell the vendors’ merchandise. For more information related to allowances received from vendors, see Note 1 of
the Notes to Consolidated Financial Statements in Item 15.
In order to expand our product assortment, we offer certain merchandise, primarily precious jewelry, which has been consigned to us from the
vendor. As of August 3, 2013 and July 28, 2012, we held consigned inventories with a cost basis of approximately $358.9 million and $328.6 million,
respectively. Consigned inventories are not reflected in our Consolidated Balance Sheets as we do not take title to consigned merchandise.
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