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Neiman Marcus Reworks China Strategy

Company plans to downsize its team there and ship from its U.S. based inventories rather than holding inventory in Chinese warehouses.

The neimanmarcus.com.cn site.

Neiman Marcus Group is rethinking its China strategy.

This story first appeared in the May 21, 2013 issue of WWD.  Subscribe Today.

The company plans to downsize its team there and ship from its U.S. based inventories rather than holding inventory in Chinese warehouses.

“We still have a team there for customer care, marketing and the Web merchandising in Shanghai but it’s a smaller team,” said Neiman’s vice president of corporate communications Ginger Reeder. “It’s still a localized China site.”

Neiman’s has begun shipping to Chinese consumers from the U.S., instead of inventories that were sent from brands to China for distribution. From the U.S., “We can offer a wider breadth of assortment and the orders are more timely,” Reeder said.

“I think specific staff will be reduced by over half, but the workload of most — like buying — will shift back to Dallas,” she said. Neiman’s has about two dozen workers in China.

“We are committed to China. We believe we can serve Chinese luxury customers and there is a future for that,” Reeder said. “We have upped our investment in Glamour Sales and we are keeping a team in Shanghai. Even though we are doing international shipping in many countries, right now, China is the only one with a dedicated site — with Mandarin translation, size conversion charts and customized creative.”

In March 2012, Neiman’s disclosed a $28 million investment in Glamour Sales Holdings, an Asian-based e-commerce site specializing in flash sales. Neiman’s has since invested another $10 million in Glamour and now owns a 44 percent stake. Glamour helped Neiman’s launch neimanmarcus.com.cn last December 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. The partnership also involves Neiman’s helping Glamour Sales expand flash sales.

At the time of the investment in Glamour Sales, Karen Katz, president and chief executive officer of Neiman Marcus Group, said the investment provided “a tremendous partner and a strong foothold in a rapidly expanding luxury market.”

Neiman’s challenge is to get Chinese consumers more familiar with its brand through marketing, fashion bloggers and editorial content. In April, the retailer staged its first fashion show in mainland China in Shanghai’s historic Bund waterfront to generate more awareness. The company is planning additional fashion presentations in China. Neiman’s also wants more Chinese to shop Neiman’s stores in the U.S., including Bergdorf Goodman. In 2012, Bergdorf held an event for a group of Chinese tourists traveling in New York.