In Neiman’s fiscal year, net earnings reached $163.7 million, versus $140.1 million in fiscal 2012. Comparable revenues increased 4.9 percent, while total revenues rose to $4.65 billion from $4.35 billion in the prior year. Neiman’s revenues have been built back up to right around pre-recession levels.
In other figures, the group’s brick-and-mortar operations generated $862.3 million in sales last quarter and $3.62 billion in sales for the year. The online business generated $256.8 million last quarter and $1.03 billion in sales for the year.
The stores generated $45.2 million in operating income in the quarter and $411.4 million for the year. Online accounted for $32.9 million and $157.7 million in operating income for the quarter and year, respectively.
Overall operating earnings for fiscal 2013 reached $446.4 million compared to $403.6 million for fiscal 2012. With wind at its back and management no longer distracted by the strain of the sale process, the Neiman’s team can return to fully focusing on growth strategies. In addition, some analysts believe the luxury market will gain steam as the economy improves. As a result of the deal, the luxury retailer has changed its name slightly from Neiman Marcus Inc. to Neiman Marcus Group Ltd.
The company did not have its usual conference call to discuss the business and its performance due to the pending transaction. But market sources pegged the strong results on tightened expenses and good inventory management. “They were lean and mean going into its filing last June for an initial public offering,” said one retail source. The IPO won’t happen now that Ares and the Canada fund have agreed to purchase the company from TPG and Warburg Pincus.
It is also believed that to further reduce expenses and show greater profitability, Neiman’s didn’t fill as many vacant jobs as it normally would have, and bought inventory more wisely for spring, leaving less merchandise to clear out. The apparel business, particularly women’s, has been tough in the last few years, and that is said to have affected Neiman’s buy. For 2013, Neiman’s capital expenditure and interest expense were slightly less than the year before.
The change in ownership raises questions about Neiman’s future strategies. The new owners have already said that priorities involve investing in the stores as well as technology, and Karen Katz, Neiman’s chief executive officer since October 2009, backed that up by saying they were keen on investing in long-term growth strategies. Neiman’s previously set $135 million in capital expenditures for 2013, largely for renovating the Michigan Avenue store in Chicago, as well as renovations at Bergdorf Goodman and a few other Neiman’s locations.
Since taking the reins, Katz has demonstrated a willingness to test new waters, in technology, service and other fronts. Last week she cited the possibility of opening more Last Call outlets. Neiman’s has 35 outlets, though its most direct competitors, Saks Inc. and Nordstrom, both operate many more outlets.
Katz has been driving the contemporary fashion side of the business, having recast the category into Cusp in-store departments throughout the full-line luxury chain and just now beginning to spend on marketing Cusp to customers. Cusp has six freestanding stores, yet the company has been reluctant to open additional Cusp freestanding units.
International expansion needs to be explored since with 41 full-line Neiman’s stores across the country, as well as having two Bergdorf Goodman stores in Manhattan, virtually all domestic store-growth opportunities have been tapped. However, a store in the Roosevelt Field mall in Garden City, N.Y., is planned. Most Neiman’s stores are highly productive and deliver strong service but not all. The Orlando, Fla., and Natick, Mass., units are said to be among the weaker locations.
While no overseas stores are in the works, Neiman’s does conduct business online in China, and has invested $38 million in Glamour Sales Holdings, an Asian-based e-commerce site specializing in flash sales, representing a 44 percent stake. Glamour helped Neiman’s launch neimanmarcus.com.cn and is helping migrate shoppers to the Neiman’s site. In addition to products, the site features editorial content, fashion expertise and behind-the-scenes videos about luxury brands. Neiman’s also ships products to other countries, though the retailer hit some road bumps in China and decided to downsize the China team and ship from its U.S. inventories rather than holding inventory in Chinese warehouses. Neiman’s continues to have personnel in China involved in customer care, marketing and Web merchandising in Shanghai.
While some analysts believe Neiman’s has an international reputation, others have said that Saks, due to its Fifth Avenue flagship drawing shoppers from all over the world, has greater overseas potential.
On the technology front, Katz has outfitted sales associates with smartphones to provide better service to customers. The mobile communication enables associates to quickly and easily communicate events, promotions and new merchandise in the stores.
From overseeing America’s fastest-growing speciality retailers to codifying cool, WWD talked to the women who are leading the way for the future of beauty. Check out our Instagram Stories to see how these women built today and are creating tomorrow. (📸: @hannah_khymych) #wwdbeauty
For @laperlalingerie's spring 2018 show, the brand chose to host their event at @thevenetianmacao. With Chinese megastars @bingbing_fan and @hubing in attendance, La Perla debuted a rock ‘n’ roll-inspired collection. The show marked the start of Sands Macao Fashion Week, which runs from October 19 to 24 — the city’s first such event. Pictured here are models backstage with glimmering eyes. #wwdfashion (📷: Cheuk-Yin To)
Trending for spring 2018: top stitch design. Gone are the days of stitch just for seams — designers are using the once-minimal detail to create strong decorative elements. (📷: Paola Testa; Styled by @andrew_shang) #wwdfashion
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)