Neiman Marcus 2008 Annual Report Download - page 9

Table of Contents
both credit card losses and income, as agreed to by the parties in response to current economic conditions and other factors. We do
not expect that any such amendments, if executed, will have a material impact on our future operating results.
Historically, our customers holding a proprietary credit card have tended to shop more frequently and have a higher level of
spending than customers paying with cash or third-party credit cards. In fiscal years 2009 and 2008, approximately 50% of our
revenues were transacted through our proprietary credit cards.
We utilize data captured through our proprietary credit card program in connection with promotional events and customer
relationship programs targeting specific customers based upon their past spending patterns for certain brands, merchandise categories
and store locations.
Integrated Multi-Channel Model. We offer products through our complementary Direct Marketing and Specialty Retail
businesses, which enables us to maximize our brand recognition and strengthen our customer relationships across all channels. Our
well-established online and catalog operation expands our reach beyond the trading area of our retail stores, as over 40% of our Direct
Marketing customers in fiscal years 2009 and 2008 were located outside of the trade areas of our existing retail locations. We also use
our e-commerce websites and catalogs as selling and marketing tools to increase the visibility and exposure of our brand and generate
customer traffic within our retail stores. We believe the combination of our retail stores and direct selling efforts is the main reason
that our multi-channel customers spend more on average than our single-channel customers (over 3 times more in each of fiscal years
2009 and 2008).
Merchandise
We carry luxury merchandise from well-recognized designers as well as emerging designers. We believe our merchandising
experience and in-depth knowledge of our customers and the markets within which we operate, allow us to select an appropriate
merchandise assortment for each of our stores that is tailored to our customers' tastes and lifestyles.
Our percentages of revenues by major merchandise category are as follows:
Years Ended
August 1,
2009
August 2,
2008
July 28,
2007
Women's Apparel 36 % 36 % 37 %
Women's Shoes, Handbags and Accessories 21 % 20 % 20 %
Cosmetics and Fragrances 11 % 11 % 11 %
Men's Apparel and Shoes 12 % 12 % 12 %
Designer and Precious Jewelry 11 % 12 % 11 %
Home Furnishings and Décor 7 % 8 % 9 %
Other 2%1%0%
100 %100 %100 %
Substantially all of our merchandise is delivered to us by our vendors as finished goods and is manufactured in numerous
locations, including Europe and the United States and, to a lesser extent, China, Mexico and South America.
Our major merchandise categories are as follows:
Women's Apparel: Women's apparel consists of dresses, eveningwear, suits, coats, and sportswear separates—skirts, pants,
blouses, jackets, and sweaters. Women's apparel occupies the largest amount of square footage within our stores. We work with
women's apparel vendors to present the merchandise and highlight the best of the vendor's product. Our primary women's apparel
vendors include Chanel, Prada, Gucci, Giorgio Armani, St. John, Akris and Escada.
Women's Shoes, Handbags and Accessories: Women's accessories include belts, gloves, scarves, hats and sunglasses and
complement our shoes and handbags assortments. Our primary vendors in this category include Manolo Blahnik, Prada, Christian
Louboutin, Gucci, Chanel and Tory Burch in ladies shoes, and handbags from Chanel, Prada, Gucci, Nancy Gonzalez and Balenciaga.
Cosmetics and Fragrances: Cosmetics and fragrances include facial and skin cosmetics, skin therapy and lotions, soaps,
fragrances, candles and beauty accessories. Our primary vendors of cosmetics and beauty products include La Mer, Chanel, Sisley,
Bobbi Brown, La Prairie, Estee Lauder and Laura Mercier.
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