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Expanding Net: Neiman Marcus Online Sales to Top $200M

Neimanmarcus.com is the driving force behind NM Direct, the e-commerce and catalogue division of Neiman Marcus Group. Here’s an update

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IRVING, Tex. — Neiman Marcus Group is weaving a bigger Web, driven by neimanmarcus.com.

The four-year-old neimanmarcus.com is part of NM Direct, the e-commerce and catalogue division of Neiman Marcus, which expects to see online sales this year pass $200 million, compared with $150 million in 2003. The bulk of that growth will come from neimanmarcus.com. The division also operates two additional Web and catalogue businesses — Chef’s Catalog of cooking tools and the Horchow Collection of lush home furnishings.

The revenue jump in Internet sales will rank neimanmarcus.com among the chain’s top three stores in volume, said Karen Katz, president and chief executive of Neiman Marcus. Perhaps more importantly, the Web site has become an effective tool for luring new customers to Neiman’s stores and mail-order business.

“Over 50 percent of our online business comes from outside our trade area,” noted Brendan Hoffman, president and ceo of NM Direct. “They come in through the Web site and then become multichannel shoppers. They’ll print pages from the Web and bring them into the store.”

At NM Direct’s offices on a quiet, suburban campus with a 700,000-square-foot pick-and-pack facility, the first sign of success is an exterior one — workers are finishing the landscaping around the newly expanded parking lot. Inside, executives are preparing to hire more buyers over the next 12 months for the Neiman Marcus brand, both in stores and online, so that all merchandise planning will be under one roof.

“Our biggest challenge is coming to grips with having inventory,” Hoffman said. “We’re consolidating all the buying here — previously, the stores bought some and we bought some. It was very hard to manage. This is such a different way of buying. We buy items deep rather than a wide assortment.”

To illustrate the kind of demand the Web can generate, Hoffman noted that, in February, the site was flooded with 20,000 visitors within an hour of an e-mail to customers touting an online gift-with-purchase beauty promotion. “Twenty-thousand people in a store at one time is unlike anything we’ve ever seen,” he marveled. “We think we can better capture the demand that’s out there.”
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