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?