October 1, 2008, 12:00 AM

Neiman Marcus is paring down catalogs in favor of the Internet

Retail chain Neiman Marcus plans to reduce the number of catalogs it mails in fiscal 2009 as the Internet continues to dominate its direct-to-consumer segment, says James E. Skinner, executive vice president and CFO.

Bill Briggs

Senior Editor

Retail chain Neiman Marcus Group Inc. plans to reduce the number of catalogs it mails in fiscal 2009 as the Internet continues to dominate its direct marketing segment, James E. Skinner, executive vice president and CFO, said on the company’s recent year-end conference call.

E-commerce is ruling the direct marketing segment, according to Neiman Marcus’ recent annual report. As a percentage of total direct revenue, Internet sales were 75.5% in fiscal year 2008, 69.7% in 2007 and 62.1% in 2006.

For FY 2008, Neiman Marcus grew web sales by 13.1% to $564.5 million from e-commerce sales of $499 million in fiscal 2007. In comparison, total revenue increased by 4.8% from $4.39 billion in fiscal 2007 to $4.6 billion in FY 2008. Overall the web accounted for 12% of total revenue, but generated 62% of growth across all channels, including stores, catalog and the Internet.

Direct segment sales for fiscal 2008 were $747.5 million and catalogs accounted for about $187 million. “We still believe in catalogs,” Skinner said. Neiman Marcus, No. 37 in the Internet Retailer Top 500 Guide, still thinks catalogs will play a role, but the company likely won’t distribute 90 million of them again as it did in fiscal 2008. “We will probably continue to reduce the number of catalogs we send,” Skinner says, as more customers use the Internet as their primary vehicle for direct purchases.

E-commerce saw increases in total number of customers, average order value, gross demand and number of orders, Skinner added.

Brendan Hoffman, president and CEO of Neiman Marcus Direct, is leaving the company to join Lord & Taylor as CEO.

Lindy Rawlinson, vice president of web operations and new business at Neiman Marcus Direct, is the keynote speaker at the Internet Retailer Web Design ‘09 Conference, Jan. 19-22 in Miami, in a session titled Neiman Marcus: Where Elegance and Simplicity Add Up to Success.

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