Neiman Marcus Case Analysis Essay

Nationally Neiman Marcus is one of the leading retailers of decorative home products and fine jewelry, but it’s biggest concern is growth. Niemen Marcus faces the dilemma of running out of growth opportunities. Neiman Marcus needs to generate a concept that will push the highest levels of growth while remaining uniform or favorable with their brand image. According to Robert Smith, “over the next five to seven years the goal is to produce a remarkable revenue growth mechanism for Neiman Marcus that will yield ($150-$200 million per year)” (p. 15). Neiman Marcus must expand and capitalize on the most attractive elements of the Neiman Marcus franchise, specifically unique top-quality merchandise. The company must find a strategy that will

The Galleries represent a notable opportunity to grow and improve their brand positioning. According to Neiman Marcus, “the size of a full-line Neiman Marcus store averages 135,000 square feet, and the Neiman Marcus Galleries would be about 10,000-11,000 square feet” (p. 1). The Galleries that Neiman Marcus would expand into, would focus on decorative giftware, along with designer and semi-precious jewelry. By using merger and acquisition strategies to strategically capture value and utilize capital, Neiman Marcus has consistently sustained a shareholder value position and a controlled, continual approach to its businesses. The Gallery opportunity will offer higher rewards to shareholders. Expansion into Galleries would entail the expansion and capitalization of rare exceptional merchandise, such as luxury jewelry. The Neiman Marcus luxury market has remained strong and successful throughout the years. According to Tansky, “the enthusiasm in shopping is not declining for customers who purchase luxury products, they continue to look for exclusive merchandise, and when the offer is encompassed by impressive service, the proposal is that much more appealing” (p. 5). Prosperous and opulent consumers seem to have a weakness for luxury jewelry. Affluent consumers are more likely to purchase quality products that last