Nieman Marcus seeks to provide best-in-class assortments of upscale apparel, accessories, jewellery, beauty, and decorative home products to customers across the US efficiently and reliably.
The first Neiman Marcus store was opened in 1907 by Herbert Marcus, his sister Carrie, and her husband, A. L. Neiman, all three of whom had worked previously in retail positions in the Dallas area. Having been frustrated by their jobs, the three decided to strike out on their own, initially launching a sales and advertising business in Atlanta in 1905.
After just two years, they were offered a buy-out-deal for the firm, given the choice between USD 25,000 or a stake in the then fledgling Coca Cola Company.
The three Neiman Marcus co-founders opted for the former, and in 1907 returned to Dallas to launch the first Neiman Marcus store.
Neiman Marcus focused initially on selling high quality women’s clothing and accessories that could not typically be found in Texas.
The company attracted affluent clientele and after just a few weeks had sold all its initial stock.
After some early success, the flagship Neiman Marcus store, and most of its merchandise, was destroyed by a fire in 1913.
The company recovered quickly, however, opening a temporary store nearby, and beginning construction of a new permanent location. This new flagship store was opened in 1914.
In 1926 Al and Carrie Neiman divorced, and Neiman’s interest in the store was bought out by the Marcus family.
Throughout the remainder of the twentieth century, the company expanded its product offerings to include menswear, and added lower priced items to its stock alongside its luxury products.
The company currently operates a network of stores across the US under the Neiman Marcus brand, as well as under the Bergdorf Goodman, MyTheresa, Last Call, Horchow and CUSP brand names.
Business model of Nieman Marcus
Neiman Marcus sells its products to the general consumer population through its network of stores.
The company typically targets more affluent customers.
According to a 2015 study, the company’s customers can categorised as follows:
- Age – the average Neiman Marcus customer was reported to be around 51 years old, with 48% of the company’s customer base being aged 50 or below;
- Gender – around 70% of the company’s customer base was reported to be female;
- Income – the company targets higher-earning customers, with 38% of its customers recording a median household income of more than USD 200,000 per annum, and 40% of its customers valuing their household net worth at USD 1 million or more;
- Reward Scheme Shoppers – comprising customers who are members of the company’s in-store loyalty program, who account for more than 40% of its overall revenue; and
- Ultra-Wealthy Customers – Neiman Marcus deliberately locates its outlets in or close to areas associated with ultra-high net worth figures, with a round 70% of Americans with assets in excess of USD 30 million living within 50 miles of a Neiman Marcus or Bergdorf Goodman store.
Neiman Marcus serves customers in the US. It does not have any significant international operations.
Neiman Marcus provides value to its customers in the following ways:
- Brand Recognition and Reputation – Neiman Marcus has established itself over more than 100 years as a reliable and respected retailer of high-end goods. Its brand is a household name and it serves a loyal customer base;
- Prestige – Neiman Marcus’ name is associated with high quality and high-end goods, including designer brand names. There is consequently an amount of prestige associated with shopping at Neiman Marcus;
- Accessibility and Convenience – Neiman Marcus operates a network of stores across the US that are located close to its target customers, and operates an online store allowing customers to purchase products from their own homes;
- Rewards and Loyalty – Neiman Marcus operates a loyalty scheme under which its members are able to access discounts and rewards. These customers account for a significant portion of the company’s revenue;
- Multiple Brands – Neiman Marcus operates stores under multiple brand names, enabling it to reach a broader customer base; and
- Customer Service – Neiman Marcus prides itself on providing excellent service and care to its customers, both in-store and after purchase.
Neiman Marcus sells its products directly to consumers. It operates an omni-channel model, selling products under the Neiman Marcus, Bergdorf Goodman, MyTheresa, Last Call, Horchow, and CUSP brand names.
This includes 42 Neiman Marcus stores across the United States, two Bergdorf Goodman stores in Manhattan, 24 Last Call locations, and three CUSP stores, as well as several online channels, including the flagship Neiman Marcus online store.
Neiman Marcus additionally operates an extensive distribution and logistics network across the US, comprising warehouses, distribution centres, and corporate offices.
This logistics network support the company’s core retail chains, and ensures that stores are supplied quickly and efficiently.
Neiman Marcus seeks to secure repeat business from its customers by offering high-quality customer service.
This includes in-store assistance provided by the company’s sales personnel, as well as services offered by the company’s dedicated customers support teams, who can be contacted over the phone and online to provide assistance to customers both before and after they make purchases.
Neiman Marcus additionally operates a membership program under the name InCircle, through which it offers regular customers a range of rewards, discounts, and benefits.
The company operates a separate online portal for its membership scheme, through which customers are able to access information on deals, track their points, and manage their profiles.
Through its website at www.neimanmarcus.com, the company provides its customers with information on its products, store locations, brand partnerships, and deals.
The company is additionally able to communicate directly with its customers through its various social media accounts, including with Facebook, Twitter, Pinterest, and Instagram.
Through its subsidiaries Neiman Marcus operates as an omni-channel retailer primarily of luxury fashion and household items in the US.
The company operates a single omni-channel segment, selling products primarily through its Neiman Marcus, Bergdorf Goodman, and MyTheresa brands.
It offers a broad range of products, primarily focused on women’s couture and designer apparel, contemporary sportswear, men’s clothing and accessories, children’s apparel, handbags, shoes, cosmetics, and precious and designer jewellery; and decorative home accessories, fine China products, crystal and silver products, and gift items.
The company also offers off-price fashion products targeted at more budget conscious customers under the Last Call brand; fashion products catering to younger customers focused on contemporary styles under the CUSP brand; and luxury home furnishings and accessories under the Horchow brand.
Neiman Marcus works closely with a broad network of companies and organisations that support its core retail operations.
These partners can be organised broadly into the following categories:
- Supplier and Vendor Partners, comprising suppliers of products and merchandise that are sold across the company’s stores and brands, as well as third-party providers of other services that support the company’s corporate operations more generally;
- Brand Partners, comprising a number of high-end designer brands that work closely with the company to market and sell products through the company’s Neiman Marcus and Bergdorf Goodman-branded stores;
- Distribution and Logistics Partners, comprising a range of distribution and logistics companies that support the company’s retail operations by providing warehousing, distribution, and transportation services;
- Rewards Partners, comprising a range of commercial enterprises and brands that work with Neiman Marcus to offer discounts, rewards, and benefits to Neiman Marcus customers as part of its InCircle membership program; and
- Strategic Partners, comprising various other companies and organisations with which the company collaborates on other projects, including development, branding, and marketing projects.
Neiman Marcus’ rewards partners include companies such as Travelex Travel Insurance, Four Season Hotel Firenze, Privé Jets, The Peninsula Beverly Hills, and The Ritz-Carlton New York. The company’s brand partners include high-profile names such as Chanel, Gucci, Tom Ford, Christian Louboutin, Prada, Louis Vuitton, Goyard, and Van Cleef and Arpels.
Neiman Marcus’ business model is based on its ability to provide high-quality products to consumers through conveniently-located outlets efficiently and with excellent customer service.
As such, the company’s key resources are its retail brands, its brand partnerships, its suppliers, its distribution and logistics infrastructure, its network of brick and mortar stores, its online store and IT infrastructure, and its personnel.
Neiman Marcus notably operates 42 outlets under the Neiman Marcus brand and two Bergdorf Goodman stores, supported by distribution, support, and office locations across the US.
Neiman Marcus owns several tradenames and service marks, including the “Neiman Marcus,” “Bergdorf Goodman” and “mytheresa” marks, that it recognises as key to its operations.
Neiman Marcus incurs costs primarily in relation to the operation of its retail network.
This includes costs associated with the acquisition of products and merchandise, the procurement of third-party services, the operation of its retail outlets – including rental and utility costs, the operation and maintenance of its logistics infrastructure, the payment of salaries and benefits to its personnel, the management of its partnerships, the operation of its online store, and the maintenance of its IT infrastructure.
In 2018, Neiman Marcus recorded cost of goods sold, including buying and occupancy costs, totaling USD 3.32 billion, and selling, general, and administrative costs totaling USD 1.18 billion.
Neiman Marcus generates revenue through the sale of luxury products to consumers through its brick and mortar stores – primarily under the Neiman Marcus, Bergdorf Goodman, and MyTheresa brands – as well as through its online store.
In 2018, the company recorded annual revenue in the amount of USD 4.90 billion. Around 65% of this revenue was derived from in-store purchases, with the remaining 35% via online transactions.