Neiman Marcus is a luxury retailer that focuses on their full-line stores and providing the best customer service and product at these stores. The company’s problem is that they have only ever focused on expanding, renovating, and adding to these full-line stores and now they cannot produce the amount of growth needed anymore. To be more specific they need to find a new opportunity for growth or else they will not continue to profit. There are many ways Neiman’s could do this, but only one will show a great amount of growth with few disadvantages. Neiman Marcus has almost reached their limit for geographic opportunities and the re-investment in stores and now needs something to keep the company as one of the top luxury department stores. Their full-line stores earn about $2 million in revenue a year and they focus on the affluent customer. These affluent customers are smart and expect to see new concepts in Neiman …show more content…
Since the company can no longer grow from what they have, then what makes the most sense is to put their money into something new that they could get a return on invested capital on. Neiman’s competitors include Saks 5th Avenue, Nordstrom, and other designer boutiques and they compete with merchandise, customer service, and assortment. Their competitors have already started creating other stores within their brands like off-price stores, resort stores, and main street stores to keep their growth. But, they have not created a specialty store like Galleries stores. In Neiman’s full-line store precious jewelry, fashion jewelry, and gifts make-up 15.7% of sales. Over a decade in Neiman Marcus’s full-line store precious jewelry has grown by $70 million, and designer jewelry by $50 million. The Galleries size would be around 10,000-11,000 sq. ft. and compared with the 11.7% sq. ft. that these product lines