FINANCE

Neiman Marcus files for IPO; looks to expand outlet center format

BY Marianne Wilson

New York — Luxury department store operator Neiman Marcus Inc. on Monday disclosed plans for a proposed public offering of up to $100 million.

The retailer’s plan, announced in a regulatory filing, comes some eight years after it was acquired for $5.1 billion by private equity firms TPG Capital and Warburg Pincus. In its filing, Neiman Marcus indicated a desire to expand its outlet center concept, Last Call, which currently operates 35 locations.

"We believe Last Call represents a meaningful growth opportunity relative to the number of the off-price retail locations of other luxury and premium multi-branded U.S. retailers," the company said. "Over the next five years, we believe there is an opportunity to approximately double our Last Call store count. Combined with lastcall.com, we believe there is an opportunity to enhance our existing, nationwide, omni-channel experience for the aspirational, price-sensitive yet fashion-minded customer."

The company’s growth strategy includes building out its multichannel capabilities and improving online sales, especially internationally.

"Our international online business represents a significant opportunity, which we intend to exploit by implementing focused marketing programs to build global brand awareness and by focusing on key geographies with strong affluent customer demographics," the company said.

Neiman Marcus is coming off a strong year. During the 12 month period ended April 27, 2013, the company reported revenues of $4.5 billion, up 6.5% from the year-ago period, and adjusted operating profit of $623 million.

Neiman Marcus won’t receive any proceeds from the offering. (All shares in an IPO would be sold by existing shareholders.) In addition to its 35 Last Call stores, the Dallas-based company operates 41 namesake stores, two Bergdorf Goodman locations, and six Cusp stores, which cater to younger customers.

In the SEC filing, Neiman Marcus did not disclose how many shares would be offered, or what the projected price range would be. The company also did not disclose what exchange it expects to list the stock on or what ticker symbol it plans to use.

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OPERATIONS

A.T. Kearney: China top market for expansion by apparel retailers

BY Marianne Wilson

China — China once again topped the A.T. Kearney’s 2013 Retail Apparel Index, which measures the market readiness of developing economies for international apparel retailers to enter. Other compelling expansion opportunities are offered by a number of countries from Latin America and the Middle East.

According to the Index, which identifies the top 10 developing countries ranked in the A.T. Kearney Global Retail Development Index in terms of market attractiveness, retail development, and country risk for clothing retail, China’s strong showing is due to its market size and strong growth in clothing sales. The rise of e-commerce, a boom in fast fashion, and the evolution of the luxury market have all shaped China’s apparel market.

“In most emerging markets, e-commerce is less than one percent of total sales: in China, it is six percent which is higher than in the United States,” noted Althea Peng, A.T. Kearney partner and study co-author. “More than three-quarters of online sales in China are in apparel.”

Over the last year several fast fashion retailers have aggressively expanded in China, according to the report, including Uniqlo. The Japanese retailer opened 65 stores in China in fiscal year 2012, bringing its total count to 145, and it plans to add 100 stores a year to reach 1,000 stores. H&M opened 52 stores in 2012 and Zara opened 37 stores. Gap has plans to open 35 stores in 2013.

Latin America makes a prominent showing in the Apparel Index, led by Chile (#3), Brazil (#5), and Mexico (#9). Apparel retailers have aggressive expansion plans for the region. Gap, which currently has 36 Latin American stores (including 28 in Mexico and four in Chile), plans to open 30 more by 2014, including its first Brazilian store in 2013. Zara has 150 stores in Latin America (56 of which are in Mexico, and 39 in Brazil), including 12 new stores built in 2012, the report said.

The Middle East remains an attractive retail apparel market with the United Arab Emirates (UAE, Kuwait, and Saudi Arabia (#6) respectively ranking 2nd, 4th and 6th place in the Index. Many retailers are testing their operations in the UAE before expanding to other Middle East countries due to its ease of doing business, sizeable retail segment, large expat community, and tourism.

The top 10 developing markets for expansion by apparel retailers are:

  1. China
  2. UAE
  3. Chile
  4. Kuwait
  5. Brazil
  6. Saudi Arabia
  7. Russia
  8. Malaysia
  9. Mexico
  10. Turkey

To read the full 2012 GRDI Report that includes the 2013 Apparel Index, go to grdi.atkearney.com.

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News

OurPet’s president announces exit

BY CSA STAFF

FAIRPORT HARBOR, Ohio — OurPet’s president John M. Silvestri has resigned citing personal reasons and will leave the company after July 5. Silvestri has been with the leading proprietary pet supply company since Feb. 12, 2012.

"John’s departure is voluntary and without any disputes,” said chairman and CEO Dr. Steven Tsengas. “We will miss John as he brought many best practices to our company that are facilitating our growth and development. We wish him the best of everything in wherever his future takes him."

Tsengas will resume the office and functions of the presidency, which he held prior to Silvestri’s hiring. Tim Viancourt, formerly VP sales at Bil-Jac Pet prior to joining OurPet’s in 2011, will continue as VP of global sales, while Gabriella DeSantis, formerly marketing director at United Pet Group, will continue as senior director of marketing. Both will report directly to Tsengas.

OurPet’s Company designs, produces and markets a broad line of accessory and consumable pet products in the U.S. and overseas. OurPet’s Websites include: www.smartscoop.com, www.ecopurenaturals.com, www.playnsqueak.com, www.flappydogtoys.com, www.clipnosis.com and www.cosmiccatnip.com.

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