Neiman Marcus plans to invest more than $500 million in digital tech
Neiman Marcus Group is kicking off a three-year intensive digital investment strategy with the purchase of a machine learning (ML) platform.
The luxury retailer has agreed to acquire Stylyze Inc., a Seattle-based, women-founded and -led technology company. The SaaS-based Stylyze ML platform offers product attribution data and curated content for relevant shopping experiences across the customer journey.
By acquiring Stylyze, Neiman Marcus intends to strengthen its ability to build a differentiated luxury experience. The retailer intends the purchase to be part of a broader $500 million-plus planned gross investment in digital technology over the next three years to support its integrated luxury retail strategy.
Neiman Marcus began its strategic partnership with Stylyze in 2018. Stylyze's products and capabilities are currently a component of the company's remote-selling platform and industry-leading clienteling tool, Connect. Associates use the platform to engage digitally with customers and provide them with white glove service.
While Stylyze's technology currently supports Neiman Marcus’ remote-selling platform and digital selling, the company plans to explore integrating its functionality into additional digital tools, including e-commerce, mobile apps, messaging channels like text message, chat, and phone calls, and other engagement channels.
Post-financial restructuring, Neiman Marcus says it is able to make strategic investments, like the acquisition of Stylyze, because of renewed financial flexibility. At the end of April 2021, Neiman Marcus reported total outstanding debt of $1.1 billion, compared to $5.1 billion the prior year. The retailer currently has available liquidity of over $850 million, compared to $132 million a year ago, and has no borrowings outstanding on a $900 million revolver.
Neiman Marcus has already implemented technology and digital solutions from over 25 companies in an effort to enhance and elevate its luxury customer experience. The company says it will continue to explore opportunities to further its integrated luxury retail focus through acquisitions, partnerships, and building out digital capabilities internally.
"Over the past year, we've been strengthening the foundation of our business. We knew the rebound was coming, and we've been experiencing the return of luxury as it accelerates. Neiman Marcus Group is perfectly positioned to capture the growing interest of luxury customers as we develop essential digital capabilities that ensure we drive profitable and sustainable growth," said Geoffroy van Raemdonck, CEO, Neiman Marcus Group. "By acquiring Stylyze, we will be able to advance our strategy of integrated luxury, building long-term relationships with our luxury customers that create emotional value and high lifetime value potential. This allows us to deepen our relationship with our customers through the use of technology."
The acquisition transaction would be expected to close in the first quarter of fiscal year 2022, subject to customary closing conditions.