ICSC: International Council of Shopping Centers

Neiman Marcus to double outlet store count after IPO

Publish Date: June 27, 2013

Category: SCT Newswire Articles
Topics: cusp, last call, neiman marcus, tpg capital, warburg pincus

The Neiman Marcus Group plans to use the roughly $100 million it expects to raise from an IPO to double the number of its outlet stores and also to expand its portfolio of Cusp stores over the next five years, according to an SEC filing. Private equity firms TPG Capital and Warburg Pincus bought Neiman Marcus Group in 2005 for $5.1 billion and set about closing roughly a dozen full-line stores and halting the expansion of the Cusp concept. Now expansion plans are on the table again and expectations are that the improving economy will spur enough investor interest to garner a big return on investment. “We intend to leverage our company’s expertise in omnichannel retailing to further expand our small format concepts, Last Call and Cusp, both through store expansion and increased online penetration,” the filing reads.

Neiman Marcus Group posted $4.5 billion in revenue for the year ended April 27, up 6.5 percent from a year earlier, and earnings totaled $428 million. The company launched its online operation in 2000, which now accounts for nearly $1 billion in annual sales. Neiman Marcus Group sees the North American luxury goods industry growing from $83 billion now to about $114 billion over the next five years, according to the filing.

The company operates 35 Last Call stores, most of which are located in factory outlet centers, and six Cusp stores, which cater to young, high-fashion customers. The company also operates 41 Neiman Marcus full-line stores and two Bergdorf Goodman stores in New York City.

The Neiman Marcus stores comprise about 5.5 million square feet, about half of that owned and half leased, while the Bergdorf Goodman stores total some 316,000 square feet of leased space, according to CoStar Group. Last Call and Cusp together encompass about 952,000 square feet of leased space.

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