Neiman Marcus Case Essay
Neiman Marcus (NM), which mainly serves the high-end retail market, is currently facing a tough future. Although it currently enjoys high profit margins and has made significant improvements in its existing brand performance, its growth has plateaued. NM believes that there is only limited potential for growth of its current full-line stores while maintaining its exclusivity. As a result, it is considering other growth opportunities. The strategic goal is to increase its revenue by at least $150 million over the next 6 years while maintaining its attractive profit margins of 15%. Of the number of possible growth options, we recommend NM to grow via the Galleries …show more content…
Enhancing relationship with emerging designers would probably impact NM most on the bottom line than on the top line, considering it would be able to leverage purchasing power with the emerging designers, and extract higher margins from the merchandise.
[do we need to estimate top line/bottom line impact?]
Of all these options, the Galleries and Acquisition of Saks are the ones that can leverage NM’s core competencies to the best ability. These avenues provide an opportunity for leveraging the marketing catalogues, customer relationships, and employee satisfaction and retention. The acquisition of existing brands such as Saks is subject to more extraneous factors (negotiations, stock valuations, government regulations, merger risks, brand value distortion) and therefore unclear as a long term strategy.
Neiman Marcus’ Positioning
Based on our understanding, we believe NM’s current positioning statement is: For the affluent customer who takes great pride in buying only top-line luxury clothing and accessories, NM store is your one-stop place for all your fashion needs since we only stock best assortment of designer boutiques and our friendly knowledgeable staff knows exactly what you are looking for.
NM’s positioning is to attract the affluent consumer, with a household income of