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.
Yesterday, the Parisian fashion house @azzaro_official cut the ribbon on a temeporary retrospective at the wing of the Musée des Arts Décoratifs in Paris. The exhibition, which shows the lasting influence of the brand’s founder Loris Azzaro, is titled “Azzaro, Fifty Sparkling Years” and presents 50 looks. In it’s ’70s heyday, fans of the brand included Jane Birkin, pictured here, Raquel Welch, Brigitte Bardot and more. See more photos on WWD.com #wwdfashion
@trinaturk and @macys Inc International Concepts line are linking up on a collection for summer — filled with accessories, swimwear and shoes. The collection will also include a Mr Turk men’s line, both of which are the designer’s first entry into a more accessibly priced area. “It’s very world-traveler, gypset-inspired,” said Turk. The Trina Turk x INC line will launch on May 15th. #wwdfashion
Assouline is paying homage to the late Azzedine Alaïa with a reprint of "Alaïa Livre de Collection.” The book is comprised of photographs of the designer's summer 1992 runway show with models Christy Turlington Burns, Naomi Campbell and Tyra Banks, pictured here at right. #wwdfashion #alaia #tyrabanks
Fall 2018 accessories take on a painterly hue, with Nebulas Blue among Pantone’s top 10 colors of the season. (📸: @jonghyupstudio ; editor: @twallz21 ; stylist and set designer: @haideefindlaylevin ) #wwdaccessories
@americanapparelusa is relaunching the brand outside of the U.S. today, opening its online store to more than 200 countries. The company is also contemplating a return to brick-and-mortar, though details have not been confirmed. In tandem with the expanded distribution is a recasting of a social media ad campagn, called “Back to Basics,” pictured here, with a focus on diversity and a cast of models above the age of 21. Read more on WWD.com #wwdnews #wwdfashion
Exclusive: @britneyspears is continuing to expand her brand. The pop icon, who appears in @kenzo ’s latest campaign, is partnering with Epic Rights to launch a line of branded merchandise. Read @hernameislex ‘s story, link in bio. #wwdnews #britneyspears
The Duchess of Cambridge channeled Princess Diana’s look upon giving birth to Prince Harry, when she and the Duke of Cambridge departed the hospital with the new baby Prince this afternoon in London. #wwdeye #princeofcambridge
The new Prince of Cambridge has arrived! The Duke and Duchess of Cambridge posed with the 8-pound newborn. She wore a look from one of her go-to designers, @jennypackham. Tap link in bio for more. #wwdeye #princeofcambridge