Neiman Marcus Group is getting ready to go slumming.
The luxury merchant is planning to open a stand-alone closeout Website to liquidate past-season and end-of-season clearance merchandise more efficiently, the company said in documents filed recently with the Securities and Exchange Commission. Currently the company sells clearance merchandise through a tab on NeimanMarcus.com.
The Dallas -based company offered few details about the clearance site other than that it is part of an effort to beef up Neiman Marcus Direct, a unit it credits with generating $504 million in the first three fiscal quarters of 2006, or 15.6% of the company’s revenue.
As part of the same effort, Neiman Marcus recently turned BergdorfGoodman.com from an information-only Website to an e-commerce site.
Online sales are the fastest-growing segment of Neiman Marcus Direct, accounting for $313.1 million in revenue in 2005 compared with $157.1 million in 2003, the company reported. Total direct revenue for fiscal 2005 was $592 million.
Neiman Marcus also credits its direct unit with helping to maximize brand recognition. Half of the company’s customers in 2005 and 46% of its customers in the first three quarters of 2006 were from outside the “trade areas” of its stores, the company reported.
“We believe the combination of our retail stores and our direct selling efforts is the main reason our multichannel customers spend more on average than our single-channel customers,” the company said in the filing. Neiman Marcus’s multichannel customers spent a whopping 3.5 times more than its single-channel customers in 2005, and 3.6 times more in the first three quarters of 2006.
The company dropped more than 100 million catalogs in fiscal 2005, and more than 1 million people bought through the one of the company’s direct channels, according to the SEC filing. Neiman Marcus also claims to have more than 1.7 million consumer e-mail addresses on file. During the past five years Neiman Marcus Direct—whose brands include home décor cataloger Horchow as well as Neiman Marcus and Bergdorf Goodman—has achieved a 7.9% compound annual growth rate.