What: The luxury department store company plans to win shoppers with redesigned stores thanks to a USD 200 million investment in enhancing services, faster shipping and digitised personal shopping.

Why it is important: The idea behind the Neiman Marcus strategy is to invest into its existing luxury customer base by offering perks like faster shipping, digitised personal shopping and premium retail spaces, assuming luxury brands will stick with the department store at a time when they want to cut out wholesalers entirely.

Nearly a year after exiting bankruptcy, Neiman Marcus Group is investing USD 500 million into a growth strategy that includes direct-selling technology and building a faster logistics network.

USD 200 million will be invested in store renovations to build out lounges, coffee bars and alteration services. In a post-Covid world, the company is betting that in-store services and amenities will further foster customer loyalty.

With shoppers returning to stores post-Covid, Neiman Marcus has seen an uptick in sales.  They grew 6% compared to 2019 during the company’s fourth quarter, which ended in July. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) in its fourth quarter grew to about USD 100 million, more than twice what the company earned in 2019, it said. E-commerce sales in fiscal year 2021, which ended in July, hit USD 1.2 billion, with digital sales representing 35% of the company’s total revenue.

To further develop the business, Neiman Marcus has been refreshing its product assortment. Neiman Marcus has been investing in its supply chain, including updating the technology in its Pennsylvania and Texas fulfilment centres so that it can offer same-day or two-day delivery to customers.

A challenge remains though. Some luxury brands are tightening distribution to cut out wholesalers like Neiman Marcus entirely. A landing page for Gucci from Neiman Marcus’ website in 2019 touted handbags, shoes, clothes and even kidswear from the brand. Today, the same page lists seven stores where Gucci merchandise is available and links to sunglasses, jewellery, and fragrance available online. Neiman Marcus is “currently working with Gucci on evolving our online approach and new partnership model in a way that supports both of our strategies.”

Inside Neiman Marcus’ Post-Bankruptcy Playbook