Neiman Marcus Group, the integrated luxury retailer (and parent of brands including Neiman Marcus and Bergdorf Goodman), announced fiscal year 2022 business highlights for the full year that ended July 31, 2022. Fueled by a prudent growth strategy, Revolutionizing Luxury Experiences, the company closed a successful year. NMG delivered over $5 billion in gross merchandise value ("GMV") and year-over-year meaningful gross margin expansion supported by healthy 80 percent full price selling. This led to 11 percent EBITDA margin for FY22.
"We are very pleased with the strong performance delivered in fiscal 2022, which validates our ambitious strategy and our team's impressive execution," said Geoffroy van Raemdonck, Chief Executive Officer of NMG. "Our fiscal year concluded at the end of July, throughout which our teams worked diligently to achieve over 30 percent comparable sales versus the previous year and $495 million in Adjusted EBITDA."
NMG's high-income customers remain loyal through challenging economic cycles:
- Top 2% of customers drive approximately 40% of total sales.
- 80% of top customers have at least $1 million of net worth.
- Their average spend is over $25,000 annually, buying with NMG 25+ times a year.
- We cultivate lasting relationships, with 90% top customer retention during FY22.
Additionally, new customers are entering the market seeking NMG's luxury, top-tier brands and curated products. The company's new loyal customers tend to be younger, spanning from Gen X to Gen Z, as younger customers entered the luxury market during the pandemic. They migrate up the engagement spectrum, reflecting growing incomes and desire for luxury.
"Our top customers are highly loyal and drove 40 percent of total sales in FY22," continued van Raemdonck. "Our brand partners come to us to reach our affluent customers through a premier integrated luxury retail experience. We believe our business model positions us well as we navigate the uncertain macroeconomic environment ahead."
Throughout fiscal year 2022, NMG remained committed to integrated luxury retail and meeting customers where they are, no matter how they shop. By providing superior levels of service as well as a curated experience online, in stores and through remote selling, NMG extended the reach of luxury brands in the U.S. market.
Affluent customers in 2022 returned to stores while continuing to shop online. These multi-channel consumers on average spent five-times more than those who shopped only one channel.
The company's stores are strategically positioned near top customers, with 70 percent of U.S. high-net-worth individuals living within 30 miles of a Neiman Marcus Group store. Nearly 70 percent of NMG stores reached their highest revenue in over a decade, while digital properties grew total visits to 300 million in FY22, marking continued growth in the online business.
"Our enhanced data analytics and personalization is designed to scale customer engagement in an intelligent and informed way, giving them flexibility to interact with us and buy based on their preferences," van Raemdonck explained.
Retail Technological Advancements
NMG continued to make important investments in data and technology that allow scale in personalizing luxury experiences. The company completed its acquisition of Stylyze at the beginning of the fiscal year, which through machine learning offers product attribution data and curated content to power relevant shopping experiences across the customer journey.
Throughout the year, NMG's proprietary remote selling tool, CONNECT, scaled selling associates' ability to connect with their clients wherever, whenever to share styling advice and product recommendations. CONNECT established a new method of selling engagement that allows customers to buy directly from their associate, no matter their location. This creates a seamless experience for the customer, increasing access to NMG's superior level of service outside the four-walls of a store. Collectively, selling associates send on average 1.5 million texts and personalized emails to customers per month.
The success of NMG's integrated model is fueled by the company's more than 3,000 selling associates, who are focused on establishing long-term relationships and emotional connections with customers that create high lifetime value potential. On average, associates have been part of the company for nearly a decade, and more than 1,000 of the company's retail associates successfully generated over $1 million in customer spend per year.
Strategic Retail Partnerships
In April, the company announced a partnership with FARFETCH, which included a commercial agreement whereby FARFETCH Platform Solutions (FPS) will re-platform the Bergdorf Goodman website and mobile application. As a result, Bergdorf Goodman will gain enhanced capabilities to introduce its digital customer experience and curated offering to customers globally, integrating seamlessly with the iconic New York City flagship.
