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Neiman Marcus Has Big Plans for Circularity

Neiman Marcus Group extended the life of more than 350,000 luxury items in 2021 by focusing on alterations, restoration and resale.

These circular initiatives are central of the company’s new environmental, social and governance (ESG) framework, CEO Geoffrey Van Raemdonck wrote in Neiman’s introductory impact report this week. By 2025, Neiman Marcus aims to divert 1 million items from landfill through its investments in in-house services and the circular economy. During 2021 alone, tailors and artisans altered 172,304 items and repaired 155,258 products.

The company’s Southeast service center repairs damaged and returned merchandise such as footwear and handbags by resoling and stretching shoes, re-dyeing and refinishing leather, cleaning or replacing hardware and more. Neiman Marcus said the center processed $81 million in merchandise in 2021, and returned 73 percent, or $59 million in product, to store shelves. While Neiman Marcus doesn’t currently advertise these services, it plans to do so in the next year. Subsidiary Bergdorf Goodman will continue a two-year partnership with luxury leather repair group Santana Leather Care, which restores goods for store clients upon request.

Meanwhile, the company sees resale as a critical channel to keep product in circulation. Neiman Marcus said its long-term equity investment in handbag and accessories re-commerce platform Fashionphile meant 22,836 items sold through resale last year. Their integration enabled consumers to drop off goods they would like to sell on the Fashionphile platform, and pick up purchases, at Neiman Marcus locations. The partnership has resulted in 40,000 resale items sold since it began in 2019.

Neiman Marcus plans to open Fashionphile selling studios featuring a curated assortment in all U.S. stores. The resale platform is currently pursuing B Corp certification, and aims to quantify the environmental impact of each product it sells through its own channel as well as the studios.

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Neiman Marcus' partnership with Fashionphile has facilitated the resale of 40,000 items.
To promote more end-of-life solutions for unsalable goods, Neiman Marcus partnered with Give Back Box last fall to make the store “the conduit between the customer’s closet and local charities.” Shoppers print pre-paid shipping labels on the retailer’s e-commerce site, and mail back their used goods. Still in its early stages, Neiman Marcus said it will receive reports each month detailing customer engagement and the volume of goods donated. Neiman Marcus

Neiman instituted a number of firsts in 2021, including measuring its carbon footprint, beginning to offset its impact with renewable energy contracts, and establishing science-based targets. It established a dedicated internal ESG team and cross-functional steering committee to lead its work and drive progress through oversight.

Third-party auditing and materiality assessments revealed that climate change is a main issue for stakeholders—and reducing carbon emissions topped the priority list. Neiman Marcus worked with engineering and environmental consulting firm Antea Group to measure Scope 1 and 2 baseline emissions for its real estate portfolio and map decarbonization plans and short-to-medium-term targets.

The firm found that emissions from purchased electricity contribute to almost 90 percent of Neiman Marcus’ current greenhouse gas (GHG) footprint. It also identified specific emissions hotspots at select locations that could be mitigated through investments in energy efficiency, AI and electrification, replacing the need for fossil fuels.

Neiman Marcus cut Scope 1 and 2 emissions by 23 percent in 2019-2020, and aims to reach a 50 percent reduction by 2025 from a 2019 baseline. Transportation emissions are another area where Neiman hopes to cut carbon. In January 2021, it said it planned to invest $90 million over two years to expand its Pittston, Penn. distribution center and revamp its main facility in Dallas. This will enable Neiman to better respond to regional needs, improving speed to shoppers and product replenishment times. While Neiman Marcus has relied heavily on its Texas facility for national distribution, it can reduce emissions and miles traveled for orders going to the East Coast by allocating them to Pittston, it said.

Most emissions related to the business come from the sourcing, manufacturing and disposal of merchandise, however, and the retailer is working with its brand partners to increase revenue from the sale of sustainable products, which it believes will fund the sector’s shift toward a more environmentally conscious supply chain.

The company is developing a preferred product attributes framework in its product management software to promote ethically and sustainably made goods prime on its e-commerce site. In order to receive placement in collections like “Fashioned For Change” and “Conscious Curation,” a brand must display one of the preferred attributes, including being made from sustainably materials, being responsibly produced, demonstrating supply chain transparency, giving back through philanthropic initiatives, or being made by a diverse designer or brand. Each attribute is met by obtaining third-party certifications from groups like the Global Organic Textile Standard (GOTS) and Oeko-Tex or participating in programs like the Open Apparel Registry.

While it doesn’t manufacture its own products, Neiman Marcus said it wants brand partners to adopt sustainable materials and processes. It joined Textile Exchange (TE) last year to access insights about materials and connect suppliers with the resources needed to make changes. Claire Bergkamp, TE’s chief operating officer, said Neiman Marcus “has the power to change their directly controlled products and influence on a much larger scale,” noting that it will take leadership from retailers to push the usage of preferred materials and “evoke the industry-wide change we need.”

Van Raemdonck said Neiman’s leadership in the industry can help foster change.

“We can and must lead our own business responsibly, and we recognize the positive ripple effects this will inspire throughout our industry,” he said.