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.
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews
@prada is introducing a new project at its men’s fall 2018 show this Sunday: “Prada Invites.” The fashion house invited four celebrated creative minds – @ronanaerwanbouroullec, Konstantin Grcic, @herzogdemeuron and @rem.koolhaas – to each create a unique item with its iconic nylon material. The designs will be unveiled on the runway show, which will take place at the company’s warehouse in Viale Ortles 25. #wwdfashion #mfwm (📷: @martinocarrera)
@kering_official is spinning off its stake in puma in an effort to focus on its luxury brands, the brand operator announced yesterday. “We are proud to have supported the turnaround of Puma, which now has unrivaled capabilities to take full advantage of the specific dynamics of its global markets and is poised to achieve substantial growth,” said François-Henri Pinault, Kering’s chief executive officer and chairman. Artémis will become a “long-term strategic shareholder” of Puma with a 29 percent stake. #wwdnews #wwdfashion (📷: @jilliansollazzo)
The fashion world mourns for celebrated street style photographer, Nabile Quenum, who died at age 32 in Paris.
Quenum, creator of the fashion blog “J’ai Perdu Ma Veste,” was a fashion week fixture, and regularly shot for New York magazine’s The Cut, among other outlets, and brands such as Louis Vuitton, Moncler and Adidas. He was also actively involved in the #NoFreePhotos initiative, which kicked off in the fall. Read more about Quenum in @kbsmoke's story on WWD.com. #wwdnews
@verwanggang and @maisonladuree have teamed up on a dessert collab called Vera Wang Pour Ladurée. The collection, which launched this week, features a specialty macaroon, as well as a wedding cake inspired by one of the designer’s gowns. “I could not imagine a more delicate or sophisticated creation to grace any couple’s celebration,” said Wang. #wwdfashion