AGED SINCE 1907 Founded in Texas by Hebert Marcus, Carrie Marcus Neiman and Al Neiman

THE CHRISTMAS BOOK Outrageous, extravagant fantasies compiled every year

“ I LIKE RICH PEOPLE.” Burton Tansky Chairman and CEO

PEOPLE AND LUXURY NOW 42% admitted they are spending less on luxury more than half said their spending is "based on need rather than want” LUXURY INSTITUTE STATE OF THE LUXURY 2009 REPORT

NEW VALUES T he typical luxury consumer has traded in high-priced fashion for quality, durable goods at a lower price. BAIN AND COMPANY

NEW TASTE Two other motives that are driving buying by the rich: connoisseurship and being an "early adopter" LEDBURY RESEARCH

THE CONNOISSEUR DICTIONARY DEFINITION A person of informed and discriminating taste.

NEW MOTIVATION HYPERCONSUMPTION Consuming for one’s own pleasure rather than to enhance one’s social status. GILLES LIPOVETSKY, AUTHOR OF HYPERMODERNTIMES

NEW EXPECTATIONS What luxury consumers want now is to spend less without compromising on brand names or quality. BAIN AND COMPANY

LUXURY BRAND ESSENTIALS RESPONDENTS RANKED 83 % Superior Quality 78% Superior Craftsmanship 69% Superior Design 58% Exclusive Products 54% Brand Heritage and History LUXURY INSTITUTE STATE OF THE LUXURY 2009 REPORT

FASHION IN THE RECESSION 'When the economy changes, it's not like you want to start eating bad-tasting chocolate.’ OLIVIER THEYSKENS

ESSENTIAL AND ACCESSIBLE LUXURY NEW TRENDS ACCORDING TO THE ECONOMIST FRACTIONAL OWNERSHIP time-shares in luxury goods and services formerly available only to those paying full price

SELECTIVE EXTRAVAGANCE NEW TRENDS ACCORDING TO THE ECONOMIST cheap goods + few genuine luxuries

HIGH-END GOES LOW-END DIFFUSION LINES COLLABORATIONS

ICONIC OVER TRENDY "Luxury is here to stay,” provided companies pare down to a "stronger, smaller core.” CONCLUSION FROM ABRAMS RESEARCH MAY 09 LUXURY BRANDS SURVEY

MAKING THE RECESSION CHIC SYMPATHETIC FASHION MAGAZINES SHOPPING EVENTS SPECIAL FEATURES

DESIGNER DISCRETION Designers know their brands are their currency and they are very wary about cheapening them. MERCEDES CARDONA, DAILY FINANCE

DESIGNER DISCRETION THE RISE OF ONLINE SALES The sites are popular with designers, who'd rather have their goods sold there than hung in clearance racks at department stores. MERCEDES CARDONA, DAILY FINANCE

BUZZ WORDS TERMS AND TITLES TO ENCOURAGE ‘STYLISH SPENDING’ Recessionista Frugalista Fashionomics

WHAT HAS ALL THIS DONE TO LUXURY? ACCESSIBLE = NO LONGER EXCLUSIVE ACCESSIBLE = COMMONPLACE FRUGALISTA = CONTRADICTORY FRUGALISTA = CHEAPENING DESIGNERS

SURVIVAL OF THE FITTEST NEW MODES OF ATTACK Most expensive thing this year: A 250k "his and hers" two-seater Icon aircraft, which comes with pilot training for two.

LOWER PRICES ACCESSIBILITY AND AFFORDABILITY Mixing in more lower-priced goods while still trying to maintain the premium image. “ We’re not vacating the top price point,” BURTON TANSKY

NM GOES DIGITAL DIVING INTO E-COMMERCE WITH GLAM MEDIA NM enables shoppers to still buy designer and feel "elite” while still buying at a discount and within their mean. TRACEY HARRINGTON MCCOY, FORMER EXECUTIVE EDITOR

NM GOES DIGITAL DIVING INTO E-COMMERCE WITH GLAM MEDIA Buying clothes can be an investment. They are acknowledging the fact it's customer's won't shop exclusively at their store but that they should buy their landmark pieces there. TRACEY HARRINGTON MCCOY, FORMER EXECUTIVE EDITOR

COMPETITION BARNEY’S: LUXURY’S HIP YOUNG INGENUE They’ve managed to curate an impressive array of emerging designers, making it the destination for the fashionably obscure. Big discounts, reasonable prices and a modern image.

COMPETITION SAKS FIFTH:THE URBAN SOPHISTICATE More diverse selection and quickly catching up with NM in prestige. They also slashed prices (but to a whopping 70%) at the start of year and started having invitation-only private sales as well.

NEIMAN’S IMAGE PROBLEM PRE-RECESSION The Elitist “ I like rich people”

RECESSION Extravagance is Over 'This whole crisis is like a big spring housecleaning — both moral and physical—bling is over. Red carpetry covered with rhinestones is out. I call it the "new modesty."’ KARL LAGERFELD, DESIGNER

RECESSION DEPARTMENT STORE PANIC: FIRE SALES 2009: Saks cut prices down to 70%. Barneys and Neiman Marcus followed suit.

SINGING A NEW SONG LOSING BRAND EQUITY “ Frugality is in fashion. The alligator belts are tightening ... Who knew a wallet could hibernate?’” BURTON TANSKY, 2009

WHAT MUST BE DONE Return Neiman Marcus’ image to being exclusive so it can appeal to true connoisseurs who value the luxury experience.