Neiman Tests Upper-Moderate Concept

Discussion
Oct 25, 2010
Tom Ryan

By Tom Ryan

Neiman Marcus is testing an upper-moderate concept aimed at more
value-seeking shoppers in suburban areas and even strip malls. Called Last
Call Studio, the concept won’t carry any clearance merchandise or product sold
at the Neiman Marcus chain.

Instead, the concept will carry lower-end products,
bought directly from vendors. The store will carry contemporary brands such
as Lafayette 148, J Brand, Seven for all Mankind and Vince in an environment
that is a hybrid of a boutique and an outlet. With emphasis on apparel, handbags
and shoes, some upscale touches include track lighting, concrete floors with
color-blocked area rugs and cohesive merchandise groupings, according to statement
by one of Neiman’s landlords.

According to a profile in The New York Times, with
lean inventories across retail, it’s become tougher to stock outlet stores
with liquidated merchandise. Moreover, buying direct should lead to dependable
offerings for consumers at Studio rather than the treasure hunt mix found in outlets.

“We’ll have more continuity in the product we’ll offer,” Tom
Lind, senior vice president and managing director for Last Call, told the Times. “If
boots are the trend of the season, she’s going to be looking for a great
boot selection, so we’ll want to have more than what we can rely on from
the store.”

Neiman officials have been working on the concept for five
years, but decided to launch it because the more upper-moderate area has seen
some strength during the recession. Wanda Gierhart, Neiman’s chief marketing
officer, told the newspaper that Studio is aimed at the shopper who “may
not have the reach level to buy the fine apparel that Neiman Marcus offers.”

The Times article
noted that a prototype of the Studio store in Dallas looks more like a career-wear
store, such as Ann Taylor or a Chico’s. New
merchandise shipments are also being planned weekly and management believes
many Studio shoppers will come almost every week versus the three to five times
a year a typical shopper visits its outlet stores. Other stores will be open
in Rockville, MD and Paramus, NJ in November.

“We want to create more trips and have faster turns, so we’re
going to go to the neighborhood where she lives,” Ms. Gierhart said.

Discussion Questions: What do you think of the Last Call Studio concept
and the prospects for the upper-moderate market? Is this an incremental business
opportunity for Neiman Marcus or a divergence that will dilute its flagship
concept?

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6 Comments on "Neiman Tests Upper-Moderate Concept"


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Gene Detroyer
Guest
10 years 6 months ago

Every business must look to move forward. This is an interesting and well thought out venture for NM. It has identified an upscale, every-business-must look to move forward. This is an interesting and well thought out venture for NM. It has identified an upscale positioning for frequent shoppers, and given it credibility with the NM name.

It is not a small NM. It has a unique positioning. It is truly an incremental business opportunity. Leadership at NM has recognized the limits to the department store model, even the NM department store model. The answer to growing their business would not be opening another department store. Last Call Studio establishes an opportunity for a broad reach that is further enhanced by a significant online positioning.

The banner is also brilliant. Last Call Studio suggests that there is an urgency to visit LCS to find upscale product opportunities, no matter in-store or online.

Cathy Hotka
Guest
10 years 6 months ago

Neimans has been working for years to develop new concepts like Cusp that can appeal to several customer segments. In a time of fundamental upheaval when significant areas of the economy are in turmoil, it makes sense for them to set their sights downward a notch, as even diehard NM customers report some bargain hunting. I would look for success here.

Carlos Arambula
Guest
10 years 6 months ago

This is an issue of brand confusion by the folks at Neiman.

The value seeker Neiman is targeting has a very defined perception of what Neiman Marcus stands for and it’s not what they are looking for. To create a second retail brand with lesser products is akin to GAP and Old Navy, except that it will still be an expensive proposition.

The idea is not bad, but not as the concept stands. Neiman will be better served by targeting their new retail brand to a younger demographic who will accept the merchandise and could even make it a “fashionable” retailer than targeting a value seeker who is not seeking for lesser products, but lower priced genuine products.

Craig Sundstrom
Guest
10 years 6 months ago

“…the concept won’t carry any clearance merchandise or product sold at the Neiman Marcus chain…dependable offerings for consumers at Studio rather than the treasure hunt mix found in outlets.”

In short, it really has nothing to do with NM other than ownership…sort of like some 5 star restaurant opening a hot dog stand. It may or may not work; obviously it depends on execution.

Carol Spieckerman
Guest
10 years 6 months ago

I’m with Carlos: this concept needs a new name. Last Call immediately sets two expectations, both of which will be quickly dashed: 1. That the brands and products in the store first resided in Neiman’s and 2. Those items are severely discounted. It’s bad enough that outlet stores are bait and switch operations, filled as they are with second-rate first-runs; now we have Neiman’s creating stores that are defined by what won’t be carried rather than what will (brands that can easily be purchased online or at, shock and horror, department stores).

These “studio’s” environmental vibes evoke Chico’s and Ann Taylor? Yawn snore!

Phil Rubin
Guest
10 years 6 months ago

The biggest plus for Last Call Studio is in fact more than its common ownership with Neiman Marcus, but the fact that NM’s outlet and clearance sales–the origin of the Last Call name–are well known among Neiman Marcus customers and those that shop the NM outlets.

The fact is, whether NM wants to admit it or not, its customers don’t shop NM exclusively any more than Bloomingdale’s or even Nordstrom’s. It’s all about share of wallet or more appropriately, share of customer, and this pseudo brand extension is one way of NM capturing more business from some of its customers and also broadening out to others, albeit the more price elastic ones.

Tiering, whether it’s brand offerings or loyalty programs, helps customers navigate and ladder their shopping and in turn, it helps brands and companies like NM do the same for customers.

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