SHANGHAI — The Neiman Marcus Group said Thursday that it is taking a “non-controlling” strategic stake in Asia-based e-commerce company Glamour Sales Holding by investing $28 million.

This story first appeared in the March 23, 2012 issue of WWD. Subscribe Today.

This will be the American retailer’s first foray into China. Neiman Marcus said it intends to launch a full-price, luxury  e-commerce website in China through Glamour Sales by the end of 2012.

“The site will have editorial content, fashion expertise and behind-the-scenes videos to make it a reliable and indispensable source of valuable insights about featured luxury brands,” the company said in a release.

“We are taking this bold step to establish Neiman Marcus Group as an international brand,” said Karen Katz, president and chief executive of the Neiman Marcus Group. “Our strategic investment in Glamour Sales gives us a tremendous partner and a strong foothold in a rapidly expanding luxury market.”


Part of Neiman’s investment will be used to help Glamour Sales expand its flash sales business in China and part will be used to build Neiman’s new site in the country. While Katz said the flash sales business will remain separate from Neiman’s full-price, multi-brand e-commerce site, it appears Glamour Sales will play a key role in migrating its existing base of 1 million active members in over 600 cities on the Mainland to Neiman’s new online shopping platform.  


“There is a natural compliment between things we do well at the Neiman Marcus Group and what Glamour Sales knows and does well,” Katz said at a press conference here. “They [Glamour Sales] will continue to operate the flash sales site and their team members will help us get our full-priced multi-brand site up and running over the months ahead.”


Neiman will relocate executives to China from its headquarters in Dallas, Texas, to work on the project. Katz said the name of the new luxury site will be decided closer to its launch date.


Other details also remain unclear, including how products on the platform will be priced as well as how in China Neiman’s will replicate the service it offers to customers in the U.S. 


“We do recognize that prices in China are higher than in other parts of the world. We will have to figure out how that pricing structure is going to take place,” Katz said. “We have to work closely with the luxury brands and the designer brands to make sure we are pricing in the same manner that they are pricing in their stores.”


Katz said part of the motivation for entering the China market was simply because it seemed like the time is right. She said it is unclear at this point whether the e-commerce site will lead to brick-and-mortar retail operations in the country for the company.


“E-commerce is becoming more important to our business,” Katz said. “As we were thinking about coming to China, we felt it was important to stay focused on e-commerce to reach beyond first- and second-tier cities.”


Part of the motivation for coming to China also stems from a motivation to make Chinese consumers more aware of Neiman Marcus when they travel overseas. During the press conference Thursday morning, videos were shown to an audience of largely Chinese journalists highlighting the history and heritage of Bergdorf Goodman, which is owned by the Neiman Marcus Group.


In January, Bergdorf held an exclusive event for a group of Chinese tourists traveling in New York. Guests included numerous designers, including Oscar de la Renta and Diane von Furstenberg.


“We do believe there is an opportunity here as we launch our business that when they [Chinese] are visiting the U.S. they will make a connection between the online business that we have in China when they see our beautiful stores or websites. We are very excited about that opportunity in the future,” said Katz.


Glamour Sales Holding, was founded in 2009 by two entrepreneurs, Olivier Chouvet and Alain Soulas. It operates the leading, authorized flash sales websites in Asia. In 2009, Thibault Villet, the former president of Coach’s China operations, founded Glamour Sales China. The company also operates a flash sales e-commerce site in Japan. 

“There will be challenges when we come to China,” Katz said. “But we are very optimistic that we will learn along the way and that we will make adjustments to our brand as we become educated.”

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