Neiman Marcus Group (NMG) plans to spend over a half-billion dollars in gross investment over the next three years to support the retailer’s integrated luxury retail strategy, and its first move toward that goal is to acquire Stylyze, Inc., the company that supports NMG's remote-selling platform and digital selling.
NMG said the intended acquisition will be the first of several future digital investments and building out of it technology capabilities.
Seattle-based, women-founded and -led technology company Stylyze is a machine learning SaaS platform that offers product attribution data and curated content to power relevant shopping experiences across the customer journey. Acquiring Stylyze will strengthen NMG's ability to build a differentiated luxury experience, it said.
"Over the past year, we've been strengthening the foundation of our business,” said Geoffroy van Raemdonck, CEO, Neiman Marcus Group. “We knew the rebound was coming, and we've been experiencing the return of luxury as it accelerates. NMG 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. 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."
NMG began its strategic partnership with Stylyze in 2018. Stylyze's products and capabilities are currently an important component of the company's remote-selling platform and industry-leading clienteling tool, CONNECT. NMG's selling associates use the platform to engage digitally with their clients and provide them with the white glove service the luxury retailer is known for – especially when it comes to personalized looks. Since the launch of CONNECT, selling associates have completed over 5,000,000 engagement sessions and placed hundreds of thousands of orders on the platform – a testament to the success of personalized, remote-selling.
"We could not be more thrilled for the opportunity to join forces with such an esteemed industry leader that brings together the best customers, brands, and selling channels," said Kristen Miller, CEO and Co-founder of Stylyze. "Our company and team have been working with NMG for over three years, and we are ready to rapidly power, accelerate, and elevate unique and distinct digitally-enabled service models."
"This is one of many examples of how we are building our digital ecosystem that will enable differentiated 'only at NMG' luxury experiences for customers," said Bob Kupbens, EVP, chief product and technology officer, Neiman Marcus Group. "Customers today are looking for seamless and unique experiences that improve their shopping journey when it comes to discovering and engaging with fashion. We have a shared alignment with Stylyze and are excited to bring their technology and stellar team on board."
While Stylyze's technology currently supports NMG's remote-selling platform and digital selling, the retailer 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.
The acquisition transaction would be expected to close in the first quarter of Fiscal Year 2022, subject to customary closing conditions.
Powered by data and machine learning across all three customer channels, NMG has already implemented technology and digital solutions from over 25 companies to enhance and elevate the luxury customer experience. NMG will continue to explore opportunities to further its integrated luxury retail focus through acquisitions, partnerships, and building out digital capabilities internally. Post-financial restructuring, the company is able to make strategic investments, like the acquisition of Stylyze, because of its renewed financial flexibility. The company had, at the end of April, total outstanding debt of $1.1 billion vs. $5.1 billion the prior year. NMG currently has available liquidity of over $850 million vs. $132 million a year ago and has no borrowings outstanding on a $900 million revolver.
"Neiman Marcus Group's more than $850 million in liquidity gives the company the capability to remain flexible and agile during this time and strategically invest in the business. NMG is stronger than ever – supported by ample liquidity giving the company the agility we've needed to support the recent double- and triple-digit growth, as compared to 2019, for our top luxury brands," said van Raemdonck. "We are capitalizing on our momentum and reimagining how we look at omnichannel. We're focused on creating an integrated luxury retail experience that spans our premium store footprint, largest U.S. luxury e-Commerce platform, and our differentiated remote-selling channel powered by our clienteling tool, CONNECT."