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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

As filed with the Securities and Exchange Commission on August 4, 2015

Registration No. 333-

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

Neiman Marcus Group, Inc.
(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)		5311 (Primary Standard Industrial Classification Code Number)		80-0950874 (I.R.S. Employer Identification Number)

One Marcus Square
1618 Main Street
Dallas, Texas 75201
(214) 743-7600
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

Tracy M. Preston, Esq.
Neiman Marcus Group, Inc.
One Marcus Square
1618 Main Street
Dallas, Texas 75201
(214) 743-7600
(Name, address, including zip code, and telephone number, including area code, of agent for service)


Copies to:
Philippa M. Bond Jonathan Benloulou Proskauer Rose LLP 2049 Century Park East, Suite 3200 Los Angeles, California 90067 (310) 557-2900/(310) 557-2193 (Facsimile)		Kirk A. Davenport II Jason M. Licht Latham & Watkins LLP 885 Third Avenue New York, New York 10022 (212) 906-1200/(212) 751-4864 (Facsimile)

Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer o		Accelerated filer o		Non-accelerated filer ý (Do not check if a smaller reporting company)		Smaller reporting company o

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price(1)(2)	Amount of Registration Fee(3)




Class A Common Stock, $0.001 par value per share	$100,000,000	$11,620

(1): Includes offering price of additional shares that the underwriters have the option to purchase to cover overallotments, if any. See "Underwriting."
(2): Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended (the "Securities Act").
(3): Calculated pursuant to Rule 457(o) under the Securities Act.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion, dated August 4, 2015

Shares

Neiman Marcus Group, Inc.

Common Stock

This is an initial public offering of shares of our common stock. Prior to this offering, there has been no public market for our common stock. We are selling shares of our common stock. The estimated initial public offering price is between $ and $ per share. We intend to apply to list our common stock on the under the symbol "NMG."

Investing in our common stock involves risks. You should consider carefully the "Risk Factors" beginning on page 13 of this prospectus.

The underwriters have an option to purchase up to additional shares of our common stock at the initial public offering price, less the underwriting discount, for the purpose of covering overallotments, if any. The underwriters can exercise this right at any time and from time to time, in whole or in part, within 30 days after the date of this prospectus.

	Per Share	Total






Public offering price	$	$

Underwriting discount	$	$

Proceeds to us (before expenses)	$	$

The underwriters expect to deliver the shares of our common stock to investors on or about , 2015.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

The date of this prospectus is , 2015

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		Page

PROSPECTUS SUMMARY			1
RISK FACTORS			13
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS			37
EQUITY CONVERSION			39
USE OF PROCEEDS			41
DIVIDEND POLICY			42
CAPITALIZATION			43
DILUTION			45
SELECTED CONSOLIDATED FINANCIAL INFORMATION AND OTHER DATA			47
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			50
BUSINESS			78
PROPERTIES			97
MANAGEMENT			99
EXECUTIVE COMPENSATION			108
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS			135
PRINCIPAL STOCKHOLDERS			138
DESCRIPTION OF CERTAIN INDEBTEDNESS			140
DESCRIPTION OF CAPITAL STOCK			147
SHARES ELIGIBLE FOR FUTURE SALE			152
MATERIAL U.S. FEDERAL INCOME AND ESTATE TAX CONSIDERATIONS TO NON-U.S. HOLDERS			154
UNDERWRITING			157
LEGAL MATTERS			162
EXPERTS			163
WHERE YOU CAN FIND MORE INFORMATION			164
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS			F-1

Neither we nor the underwriters have authorized anyone to give you any information or to make any representations other than those contained in this prospectus and in any related free-writing prospectus we have prepared or authorized to be delivered to you. Neither we nor the underwriters take any responsibility for, or can provide any assurance as to the reliability of, any other information that others may give you. Neither we nor the underwriters are making an offer of these securities in any jurisdiction where the offer is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus, regardless of the time of delivery of this prospectus or any sale of our common stock.

Persons who come into possession of this prospectus and any related free-writing prospectus in jurisdictions outside the United States are required to inform themselves about and to observe any restrictions as to this offering and the distribution of this prospectus and any such free-writing prospectus applicable to that jurisdiction.

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Our Common Stock

After giving effect to the Equity Conversion (as defined below), we will have two authorized classes of common stock: Class A common stock (as defined below) and Class B common stock (as defined below). Our Class B common stock generally will have rights identical to our Class A common stock, except that Class B common stock will be non-voting with respect to the election and removal of directors, and will be convertible into our Class A common stock on a one-to-one basis at any time and from time to time at the election of the holder. Additionally, each share of Class A common stock is convertible into one share of Class B common stock at any time and from time to time at the option of the holder so long as such holder holds one or more shares of Class B common stock at the time of conversion. In this prospectus, unless otherwise indicated or the context suggests otherwise, references to our "common stock" refer to our Class A common stock. See "Equity Conversion."

Market and Industry Data

We obtained the industry, market and competitive position data used throughout this prospectus from our own internal estimates and research, as well as from industry and general publications and research, surveys and studies conducted by third parties (including Euromonitor International Ltd., or "Euromonitor," and Wealth-X). We did not fund and are not otherwise affiliated with the third-party sources that we cite. All industry data from Euromonitor International is presented using retail selling prices and in real terms, or unadjusted for inflation, and all transactions in foreign currency are translated to U.S. dollars, using the 2014 year-end exchange rates.

Internal data and estimates are based upon information obtained from trade and business organizations and other contacts in the markets in which we operate and management's understanding of industry conditions. Statements based on internal data and estimates and management's understanding are distinguished by the use of the words "we believe" or similar formulations.

Research by Euromonitor International should not be considered as the opinion of Euromonitor International as to the value of any security or the advisability of investing in the Company and accordingly, such information should not be relied upon for making any investment decision in respect of the Company.

While we believe the industry, market and competitive position data used throughout this prospectus to be accurate as of the date of this prospectus, projections, assumptions and estimates of our future performance and the future performance of our industry are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those discussed under "Special Note Regarding Forward-Looking Statements" and "Risk Factors." These and other factors could cause our results to differ materially from the projections, assumptions and estimates expressed in this prospectus, including those based on the estimates made by independent industry analysts, other third-party sources and us.

Basis of Presentation

Neiman Marcus Group, Inc. (f/k/a NM Mariposa Holdings, Inc.), the issuer of common stock in this offering, was incorporated on September 9, 2013 and became the ultimate parent company of our subsidiaries upon consummation of the Acquisition (as defined below). All of the financial information in this prospectus prior to that time represents the results of operations of our indirect subsidiary, Neiman Marcus Group LTD LLC (f/k/a Neiman Marcus Group LTD Inc. and Neiman Marcus, Inc.).

The accompanying Consolidated Financial Statements (as defined below) are presented as "Predecessor" or "Successor" to indicate whether they relate to the period preceding the Acquisition or the period succeeding the Acquisition, respectively. All significant intercompany accounts and transactions have been eliminated.

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Throughout this prospectus, we have prepared our presentation and discussion of the results of operations for the fiscal year ended August 2, 2014 by comparing the results of operations of the Predecessor for the fiscal year ended August 3, 2013 to the combined amounts obtained by adding the results of operations and cash flows for the Predecessor thirteen week period ended November 2, 2013 and the Successor thirty-nine week period ended August 2, 2014. We have also prepared our presentation and discussion of the results of operations for the thirty-nine weeks ended May 3, 2014 by adding the operations and cash flows for the Predecessor thirteen week period ended November 2, 2013 and the Successor twenty-six week period ended May 3, 2014. Although this combined presentation does not comply with U.S. generally accepted accounting principles (GAAP), we believe that it assists readers in understanding and assessing the trends and significant changes in our results of operations, provides a more meaningful method of comparison and does not impact the drivers of the financial changes between the relevant periods. The combined results of operations have not been prepared on a pro forma basis under applicable regulations and may not reflect the actual results we would have achieved absent the Acquisition and may not be predictive of future results of operations. For a presentation of our results of operations for the fiscal year ended August 2, 2014 and the thirty-nine weeks ended May 3, 2014 on a GAAP basis showing the separate Predecessor and Successor periods, see the accompanying Consolidated Financial Statements and Condensed Consolidated Financial Statements.

We refer to our audited financial statements for the fiscal years ended July 31, 2010, July 30, 2011, July 28, 2012, August 3, 2013 and August 2, 2014 as the "Consolidated Financial Statements." We refer to our unaudited financial statements for the thirty-nine weeks ended May 3, 2014 and May 2, 2015 included elsewhere in this prospectus as the "Condensed Consolidated Financial Statements."

Certain amounts presented in tables are subject to rounding adjustments and, as a result, the totals in such tables may not sum.

Trademarks

We own or have rights to trademarks or tradenames that we use in conjunction with the operation of our business. Solely for convenience, trademarks and tradenames referred to in this prospectus may appear without the ® or ™ symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent of the law, our rights or the rights of the applicable licensor to these trademarks and tradenames. In this prospectus, we also refer to product names, trademarks, tradenames and service marks that are the property of other companies. Each of the product names, trademarks, tradenames or service marks of other companies appearing in this prospectus belongs to its owners. Our use or display of other companies' product names, trademarks, tradenames or service marks is not intended to and does not imply a relationship with, or endorsement or sponsorship by us of, the product, trademark, tradename or service mark owner, unless we otherwise indicate.

Comparable Revenues

With respect to any period, comparable revenues include (i) revenues derived from our retail stores open for more than fifty-two weeks, including stores that have been relocated or expanded, and (ii) revenues from our online operations. Comparable revenues exclude (i) revenues of closed stores,

iii

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including our Neiman Marcus store in Minneapolis, which we closed in January 2013, (ii) revenues from designer websites created and operated pursuant to contractual arrangements with certain designers, all of which expired by the first quarter of fiscal year 2015, and (iii) revenues from our MyTheresa brand, which we acquired in October 2014. The calculation of the change in comparable revenues for (i) fiscal year 2013 is based on revenues for the fifty-two weeks ended July 27, 2013 compared to revenues for the fifty-two weeks ended July 28, 2012 and (ii) fiscal year 2014 is based on revenues for the fifty-two weeks ended August 2, 2014 compared to revenues for the fifty-two weeks ended July 27, 2013.

Non-GAAP Financial Measures

To supplement our financial information presented in accordance with GAAP, we use Adjusted EBITDA and Adjusted Net Earnings to monitor and evaluate the performance of our business and believe the presentation of these measures enhances investors' ability to analyze trends in our business and evaluate our performance relative to other companies in our industry. We define (i) Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, further adjusted to eliminate the effects of items management does not believe are representative of our ongoing performance, and (ii) Adjusted Net Earnings as net earnings (loss) adjusted to eliminate the effects of items management does not believe are representative of our ongoing performance. These financial metrics are not presentations made in accordance with GAAP.

Adjusted EBITDA and Adjusted Net Earnings should not be considered as alternatives to operating earnings (loss) or net earnings (loss) as measures of operating performance. In addition, Adjusted EBITDA and Adjusted Net Earnings are not presented as and should not be considered as alternatives to cash flows as measures of liquidity. Adjusted EBITDA and Adjusted Net Earnings have important limitations as analytical tools and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP.

These limitations include the fact that:

•

Adjusted EBITDA and Adjusted Net Earnings:

•: exclude certain tax payments that may represent a reduction in cash available to us;
•: exclude certain adjustments for purchase accounting;
•: do not reflect changes in, or cash requirements for, our working capital needs, capital expenditures or contractual commitments;
•: in the case of Adjusted EBITDA, does not reflect our significant interest expense; and
•: do not reflect the cash requirements necessary to service interest or principal payments on our debt.

•

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA and Adjusted Net Earnings do not reflect any cash requirements for such replacements; and

•

other companies in our industry may calculate Adjusted EBITDA and Adjusted Net Earnings differently than we do, limiting their usefulness as comparative measures.

In calculating these financial measures, we make certain adjustments that are based on assumptions and estimates that may prove inaccurate. In addition, in evaluating these financial measures, you should be aware that in the future we may incur expenses similar to those eliminated in this presentation. For reconciliations of Adjusted EBITDA and Adjusted Net Earnings to net earnings (loss), a GAAP measure, see "Prospectus Summary—Summary Financial and Other Data" and "Selected Consolidated Financial Information and Other Data."

Additionally, throughout this prospectus we have prepared our presentation and discussion of the results of operations for the fiscal year ended August 2, 2014 and the thirty-nine weeks ended May 3, 2014 by adding the results of operations and cash flows for the Predecessor and the Successor, which is not in accordance with GAAP. See "—Basis of Presentation."

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PROSPECTUS SUMMARY

The following summary contains selected information about us and about this offering. It does not contain all of the information that is important to you and your investment decision. Before you make an investment decision, you should review this prospectus in its entirety, including matters set forth under "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and our Consolidated Financial Statements and Condensed Consolidated Financial Statements and the related notes included elsewhere in this prospectus. Some of the statements in the following summary constitute forward-looking statements. See "Special Note Regarding Forward-Looking Statements."

In this prospectus, unless otherwise indicated or the context suggests otherwise, references to "Neiman Marcus Group, Inc.," "Neiman Marcus Group," the "Company," "we," "us," and "our" refer to Neiman Marcus Group, Inc., a Delaware corporation, and, where appropriate, its consolidated subsidiaries. Unless otherwise indicated, the information in this prospectus (i) has been adjusted to give effect to the Equity Conversion (as defined below) and (ii) assumes no exercise by the underwriters of their option to purchase additional shares of our common stock to cover overallotments, if any.

Our Company

Founded over 100 years ago, we are one of the largest omni-channel luxury fashion retailers in the world, with approximately $4.8 billion in revenues for fiscal year 2014, of which approximately 24% were transacted online. Our Neiman Marcus, Bergdorf Goodman and MyTheresa brands are synonymous with fashion, luxury and style. We offer a distinctive selection of women's and men's apparel, handbags, shoes, cosmetics and precious and designer jewelry from premier luxury and fashion designers to our loyal and affluent customers "anytime, anywhere, any device." We have a longstanding heritage of providing the highest level of personalized, concierge-style service to our customers through our experienced team of sales associates.

Under each of our primary brands, we offer our customers a curated and compelling assortment of narrowly distributed merchandise from luxury and fashion designers, including Chanel, Gucci, Prada, Akris, Brioni, Ermenegildo Zegna, David Yurman, Christian Louboutin, Valentino, Burberry, Louis Vuitton, Goyard, Brunello Cucinelli, Van Cleef & Arpels and Tom Ford. We believe we are the retail partner of choice to luxury designers because we offer a distinctive distribution channel that accesses our loyal and affluent customers and adhere to strict presentation, marketing and promotional standards consistent with the luxury experience. We also have a long history of identifying, partnering with and nurturing emerging designers with the potential for rapid growth. The combined offering from established and emerging designers ensures our merchandise assortment remains unique, compelling and relevant as fashion trends evolve.

As a leader in omni-channel retailing, we provide our customers a deep assortment of luxury merchandise and a consistent, seamless shopping experience, whether our customers shop in our stores, on our websites or via e-mail, text or phone communications with our sales associates. Our comprehensive digital platform integrates and personalizes the online and in-store experience. We empower our sales associates with mobile devices and proprietary technology to improve their connection with our customers, and we utilize advanced analytics to personalize merchandise presentations to our customers when they shop online. We believe that over 75% of the total luxury spending of our customers is digitally influenced.

We engage our customers primarily through three brands:

Neiman Marcus. Our Neiman Marcus brand caters to affluent luxury customers. We operate 41 full-line stores in marquee retail locations in major U.S. markets. Our stores are designed to provide a modern, luxurious ambiance by blending art, architecture and technology. In addition, we provide our

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customers access to our Neiman Marcus brand through our website, neimanmarcus.com, and our mobile app.

Bergdorf Goodman. Our Bergdorf Goodman brand caters to the most discerning luxury clientele. We operate two full-line stores that feature elegant shopping environments in landmark locations on Fifth Avenue in New York City and through our Bergdorf Goodman online platform, bergdorfgoodman.com. The Bergdorf Goodman stores are our most productive, with in-store sales per square foot of approximately 3.5x that of our total full-line stores.

MyTheresa. Our MyTheresa brand appeals to younger, fashion-forward, luxury customers, primarily from Europe, Asia and the Middle East. We operate mytheresa.com, our mobile app and the THERESA flagship store in Munich, Germany.

Based only on sales transacted in store, the combined productivity of our 43 full-line stores was $589 per square foot for the twelve-month period ended May 2, 2015.

Our Industry

We operate in the large and growing global luxury fashion market, which includes the sales of apparel, accessories, watches, jewelry and beauty products. According to Euromonitor International, the global luxury fashion market is projected to grow from $308 billion in 2015 to $354 billion in 2019, representing a compounded annual growth rate (CAGR) of 3.6%. Over the same period, the North American luxury fashion market is projected to grow from $81 billion to $95 billion, or at a CAGR of 4.1%. Additionally, the luxury fashion market in Asia Pacific and the Middle East and Africa is projected to grow at a rate over 45% faster than the global luxury fashion market and at a rate over 25% faster than the North American luxury market, to $120 billion in 2019.

The increasing demand for luxury fashion will be driven primarily by the growing affluence of luxury consumers in the North American and other developed markets and by the increasing desire for luxury goods exhibited by consumers in developing international markets, especially Asia and the Middle East. According to Wealth-X, the United States is the largest ultra high net worth country in the world, accounting for a third of the global ultra high net worth population and wealth. In 2013, the number of ultra high net worth U.S. households grew year-over-year by over 8% and the total wealth of those households by over 9%. Asia's ultra high net worth population is the fastest-growing in the world and the wealth of those ultra high net worth households is expected to exceed the wealth of ultra high net worth households in Europe within three years and the United States within 10 years.

Technology has transformed how global consumers discover and purchase luxury goods by combining their in-store and online activity to identify a potential purchase, evaluate brand alternatives and use social media to share feedback regarding potential purchase decisions. According to Euromonitor International, the online sales of the luxury goods market represent over 4% of the U.S. luxury goods market by value in 2014, an increase of over 40% from 2009. We believe that we are uniquely positioned to benefit from the increasing demand and adoption of omni-channel shopping among domestic and international luxury consumers.

Our Customers

Our customers are educated, affluent and digitally connected. The average age of our customers is 51 and approximately 48% of our customers are 50 or younger. Approximately 79% of our customers are female and approximately 38% of our customers have a median household income of over $200,000. Our customers are active on social media, and we engage them through an active presence on Facebook, Twitter, Instagram and Pinterest, our primary social media platforms.

Our InCircle loyalty program is designed to cultivate long-term relationships with our customers. This program includes marketing features, such as private in-store events, as well as the ability to

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accumulate points for qualifying purchases. Approximately 40% of our total revenues in fiscal year 2014 were generated by our InCircle loyalty program members who achieved reward status. These customers spend approximately 11 times more annually with us than our other customers.

Our Competitive Strengths

Preeminent Gateway to the Luxury Customer. We have strong relationships with many of the world's most affluent luxury consumers built upon a heritage of exceptional customer service. We provide our customers with access to a curated collection of merchandise from the world's leading luxury and fashion designers. Our customers can access our merchandise "anytime, anywhere, any device" in an upscale, personalized shopping environment in our premier retail locations or through our digital platforms. Our highly trained associates are always available to provide high-quality customer service, both in store and online. Our position as a preeminent gateway to the global luxury customer makes us a desirable partner to luxury designers and allows us to acquire a superior allocation of narrowly distributed merchandise.

With approximately $4.8 billion in revenues for fiscal year 2014, we are one of the largest omni-channel luxury fashion retailers in the world. We reach our luxury customers through our portfolio of 43 full-line stores and our digital platform. Our full-line stores offer an unmatched combination of luxurious environments and iconic destinations and are located in the most prestigious shopping districts of leading cities, including New York (Fifth Avenue near Central Park), Los Angeles (Beverly Hills), Dallas (North Park), Houston (Galleria), Chicago (Michigan Avenue), Miami (Bal Harbour) and San Francisco (Union Square). According to Wealth-X, approximately 70% of ultra high net worth individuals in the United States reside within 50 miles of a Neiman Marcus or Bergdorf Goodman store. Our portfolio of stores in iconic locations would be virtually impossible to replicate.

Leading Portfolio of Established and Emerging Luxury and Fashion Designers. We have deep and longstanding relationships with most of the world's exclusive luxury designers, including Chanel, Gucci, Prada, Akris, Brioni, Ermenegildo Zegna, David Yurman, Christian Louboutin, Valentino, Burberry, Louis Vuitton, Goyard, Brunello Cucinelli, Van Cleef & Arpels and Tom Ford. Our designer partners regard us as their retailer of choice due to our commitment to offering merchandise in an environment consistent with their images and marketing and promotional standards. Each of our Neiman Marcus, Bergdorf Goodman and MyTheresa brands has a dedicated merchandising team, enabling us to optimize assortments based on our superior curation abilities, extensive local market knowledge and data analytics. We have a long history of identifying, partnering with and nurturing emerging design talent. We believe these relationships, along with our size, reach and reputation, allow us to obtain a superior assortment and larger allocation of merchandise from a more desirable portfolio of luxury and fashion designers than our competitors. As a result, we offer a compelling and highly differentiated selection of narrowly distributed merchandise.

Leading Innovator in Omni-Channel Retail. We are dedicated to remaining at the forefront of innovation in retail and are transforming the way customers shop for luxury goods. We have made significant investments to address the dynamic and evolving ways in which customers interact with retailers and to realign our business to support our omni-channel approach. We shifted our organization under the Neiman Marcus brand so that both stores and online report to our President, Neiman Marcus Stores and Online, who is responsible for the total customer experience. We believe this role is unique among our peers. We also merged the merchandising and planning organizations for Neiman Marcus stores and Neiman Marcus online into one team under our President, Chief Merchandising Officer. These initiatives have enabled us to better coordinate our in-store and online marketing campaigns, merchandise assortments, creative resources, promotional calendars and delivery, pick-up and return processes.

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We provide our sales associates and our customers with leading-edge technology and capabilities. Recognizing our customers' increasing usage of mobile devices, we believe Neiman Marcus was the first national retailer to provide smartphones and dedicated mobile apps to sales associates to communicate with customers. This has enabled our sales associates to strengthen relationships with our customers in real time through text messages and emails. We also offer customers a variety of options to take delivery of their purchases and make returns, including free shipping and returns, same-day delivery, buy online and pick up in store and buy online and pick up in department.

Culture of Superior Customer Service Provided by Highly Trained Sales Associates. Our sales associates are dedicated to always providing the exceptional service our customers expect from a luxury experience. Consistent with our emphasis on building sales through long-term customer relationships, our sales associates are trained in relationship selling, rather than transaction-based results. Our selling culture encourages them to initiate and maintain contact with our customers to provide personalized updates on the latest merchandise offerings and fashion trends. Our sales associates are educated in fashion trends both by us and directly by designers and are empowered to act as personal shoppers and style advisors to our affluent customers. We have invested in technology to enhance our sales associates' ability to develop and maintain close relationships with our customers. Sales associates who have been with us for longer than one year have an average tenure of approximately nine years and had a turnover rate in fiscal year 2014 of 12%. These tenured associates are highly productive, with more than 40% of them each generating over $750,000 of revenues in fiscal year 2014.

Strong and Consistent Financial Performance. Our business model has allowed us to achieve strong financial results. From fiscal year 2010 through fiscal year 2014, we increased revenues from $3.7 billion to $4.8 billion, representing a CAGR of 7.0%. Through the end of our third quarter of fiscal year 2015, we have achieved 22 consecutive quarters of positive quarterly comparable revenue growth, with an average quarterly increase of over 6%. From fiscal year 2010 through fiscal year 2014, we increased our Adjusted EBITDA from $474 million to $698 million, representing a CAGR of 10.2%.

Exceptional Management Team with Specialized Skills. Our management team is led by Karen W. Katz, our President and Chief Executive Officer. Over the past 30 years, Ms. Katz has held multiple store and merchandising leadership roles at the Company, as well as responsibility for our online business. Our leadership team has a deep understanding of the luxury customer and close relationships with luxury and fashion designers. They also have expertise in managing and motivating sales associates for affluent customers, as well as all aspects of omni-channel retailing. With an average of 20 years of industry experience and 11 years at the Neiman Marcus Group, our senior leadership team has a demonstrated track record of delivering strong growth and increased profitability.

Our Growth Strategy

We expect to continue driving our sales and profit growth by executing the following strategies:

Invest in Technology to Drive Revenues and Enhance Customer Loyalty. Since Ms. Katz became our President and Chief Executive Officer in 2010, we have moved aggressively to identify and develop ways to utilize technology to transform and grow our business. Our President, Neiman Marcus Stores and Online brings the insights developed over 20 years of technology and e-commerce experience to his role, which includes responsibility for the total customer experience. We have also added executives with extensive technology and e-commerce experience to our board of directors. The components of our technology initiative include:

•: Personalize the shopping experience: We are able to associate approximately 90% of our total revenues with specific customers. Additionally, we are able to associate substantially all browsing behavior on our digital platforms with unique individuals. By aggregating this data and employing advanced analytics, we are able to generate a single view of these customers'

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engagement with our brands. We utilize this data to enhance the interactions with our customers when they are in our stores and personalize the presentation of merchandise to our customers when they shop online. We employ the same data to increase the efficiency and effectiveness of both our traditional and digital marketing. We intend to continue to invest in advanced algorithms and methodologies to improve the relevance of personalized merchandise suggestions and the effectiveness of our marketing spend.

•: Productivity: Our store management tracks a range of sales productivity metrics on a real-time basis, including comparisons of sales performance by category, department and brand, and comparisons of sales performance to targets. We also capture metrics to measure our sales associates' usage of our proprietary mobile technology, including the nature and frequency of communication with our customers. We believe that as our sales associates continue to optimize their utilization of the full and evolving functionality of our mobile technology, we will improve sales productivity and sales associate efficiency and increase the number and quality of customer-facing interactions.
•: NMG One: We are in the process of implementing a new Oracle-based merchandising system, which we call NMG One, that will enable us to purchase, share, manage and sell our inventory across channels more efficiently. We expect the implementation of NMG One to be substantially completed during calendar year 2016, and expect to see significant margin and cash flow benefits in the future.
•: Mobile: We are investing significant resources to enable our customers to browse and shop online and in store on mobile devices. We continually enhance the functionality and user interface of our platforms to incorporate the latest available technology. We expect that improvements in our mobile technology will enable us to generate further insights into our customers and drive greater engagement and loyalty.

Increase Revenue Through Innovative Merchandising Strategies. We have a history of leadership and innovation in luxury and fashion merchandising. Over many years, we have developed deep and longstanding relationships with leading designers. Our most senior merchants, including our President and Chief Executive Officer, President and Chief Merchandising Officer of Neiman Marcus, and President of Bergdorf Goodman, each have over 20 years of experience working with luxury fashion designers. These close relationships allow us to collaborate with the designers on a broad range of activities to differentiate our merchandise assortment.

Our merchandising strategies include:

•: Create unique and carefully curated assortments by working with leading designers. Areas of focus include achieving a greater level of exclusive merchandise, negotiating exclusivity for merchandise categories and geographies, collaborating with designers on brand extensions into new merchandise categories and increasing our allocation of the best-trending items.
•: Provide insight and guidance to designers regarding merchandise attributes (including pricing, fabrics and materials, silhouette, fit, classification, color direction and other trends), marketing and operations, thereby helping them optimize their product offerings and elevate their brand profiles.
•: Partner with designers to create new in-store shops and remodel existing ones.
•: Identify new luxury fashion designers and provide them the opportunity to rapidly grow their businesses and increase their exposure through our omni-channel retail platform.
•: Leverage our omni-channel capabilities by optimizing the selection of merchandise categories and items that are presented in store, online or both.

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These merchandising strategies are designed to bring uniqueness to our assortment and newness to our stores and to ensure we reinforce our merchandising leadership to the luxury fashion consumer.

Grow Our International Footprint. Through our acquisition of MyTheresa in October 2014, we became the only omni-channel multi-branded luxury fashion retailer with a global platform. MyTheresa is a high-growth luxury fashion retailer with revenues of €136 million during the twelve-month period ended June 30, 2015, representing a 38% increase over the prior twelve-month period. We are expanding MyTheresa's merchandise offering through Neiman Marcus's and Bergdorf Goodman's strong relationships with luxury and fashion designers. We are applying best practices from our Neiman Marcus and Bergdorf Goodman brands to enhance the merchandising and the marketing programs of MyTheresa. MyTheresa is expected to contribute to our future comparable revenue growth.

We also will utilize the MyTheresa platform to grow Neiman Marcus and Bergdorf Goodman revenues internationally. MyTheresa's fulfillment capabilities provide us with the infrastructure to source and distribute Neiman Marcus Group merchandise directly in Europe, which gives us a distinct logistical advantage over many of our U.S.-based competitors.

In addition, given the high global awareness of our brands, we believe there may be opportunities to pursue growth through international acquisitions and the opening of new stores in premier locations in Europe, the Middle East and Asia under our Neiman Marcus, Bergdorf Goodman and MyTheresa brands.

Invest in Our Store Base to Generate Attractive Returns. We have embarked on a significant capital investment program in our stores. We plan to remodel 23 of our 43 full-line stores, including Bergdorf Goodman in New York City and our Neiman Marcus stores in Beverly Hills, Boston, Houston and Palo Alto. In fiscal year 2016, the program contemplates remodeling approximately 7% of our over 850 designer shops and increasing the number of designer shops by approximately 20%.

The store remodeling program will modernize our stores and reallocate selling space to more productive merchandise categories. It will enhance the presentation of merchandise from select luxury designers through continued building of new designer shops within our stores and remodels of many existing designer shops. We believe these actions will strengthen our relationships with our designers, increase customer traffic and generate significant returns.

Expand Our Full-Line Store Base in Select Domestic Locations. We will continue to evaluate opportunities to open full-line stores in major U.S. markets to add to our portfolio of prestigious shopping destinations. We have a disciplined approach to new store development, based on an analytical, research-driven site selection method and a rigorous real estate approval process. We currently have two Neiman Marcus locations in development in New York:

•: Roosevelt Field: We expect to open an approximately 100,000 square-foot full-line Neiman Marcus store in Long Island, New York in the third quarter of fiscal year 2016. The store will be located in the Roosevelt Field Mall in Garden City, which is currently undergoing a $200 million redevelopment program.
•: Hudson Yards: We have signed a lease to open a flagship full-line Neiman Marcus store on Manhattan's flourishing west side at Hudson Yards, a new $20 billion, 28-acre mixed-use development project. The approximately 250,000 square-foot, multi-level store, which we currently expect to open in fiscal year 2019, marks the first full-line Neiman Marcus store in New York City and will anchor the one-million-square-foot Shops at Hudson Yards. This new store will offer to New York's residents and visitors Neiman Marcus's signature mix of the world's most exclusive luxury brands and superior customer service.

Expand Our Operating Margins. We have embarked on a comprehensive cost re-engineering project called "Organizing for Growth" to optimize our resources and organizational processes. We are

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addressing over $1 billion of annual costs across multiple functional areas including stores, marketing and distribution, and we expect this project will result in efficiencies and cost savings, improving operating margins.

In addition, over the last 24 months, we have invested significantly in a range of initiatives including transitioning to free shipping and free returns, remodeling stores, innovating with technology (including NMG One) and realigning our merchant organization to position us for future revenue growth. We believe that as our revenues grow, we will be able to leverage these investments, along with other fixed costs of our business, resulting in operating margin improvements.

Our Sponsors

Entities affiliated with Ares Management, L.P. (Ares) and Canada Pension Plan Investment Board (CPPIB and, together with Ares, our Sponsors) and certain co-investors hold substantially all of our outstanding common stock. After giving effect to this offering and the Equity Conversion, Ares and CPPIB will hold and shares, respectively, of our aggregate common stock, representing approximately % and %, respectively, of our aggregate common stock. Our Sponsors will have significant power to control our affairs and policies, including with respect to the election of directors (and through the election of directors and the appointment of management). Our Class A common stock and Class B common stock vote together as a single class on all matters and are substantially identical in all respects, except that our Class B common stock does not entitle its holder to vote for the election or removal of directors. In addition, a holder of Class B common stock may, at any time, elect to convert shares of Class B common stock into an equal number of shares of Class A common stock or, under certain circumstances, convert shares of Class A common stock into an equal number of shares of Class B common stock. See "Equity Conversion."

Corporate Information

Neiman Marcus Group, Inc. (f/k/a NM Mariposa Holdings, Inc.), a Delaware corporation, was incorporated on September 9, 2013 in connection with our Sponsors' acquisition of the Company. On October 25, 2013, Neiman Marcus Group LTD LLC (f/k/a Neiman Marcus Group LTD Inc. and Neiman Marcus, Inc.) merged with and into Mariposa Merger Sub LLC (Mariposa) pursuant to an Agreement and Plan of Merger, dated September 9, 2013, by and among Neiman Marcus Group, Inc., Mariposa and Neiman Marcus Group LTD LLC, with Neiman Marcus Group LTD LLC surviving the merger as a wholly owned subsidiary of Neiman Marcus Group, Inc. (the Acquisition). We are owned by our Sponsors and certain co-investors. We changed our name to Neiman Marcus Group, Inc. on May 29, 2015. Our principal executive offices are located at One Marcus Square, 1618 Main Street, Dallas, Texas 75201. Our telephone number is (214) 743-7600. Our website address is www.neimanmarcusgroup.com. The information on, or accessible through, our website is not a part of this prospectus or the registration statement of which this prospectus forms a part, nor is such information incorporated by reference herein, and you should not rely on such information in making a decision to purchase our common stock.

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The Offering


Common stock offered by us		shares
Common stock to be issued and outstanding immediately after this offering		shares, including shares of Class A common stock and shares of Class B common stock.
Overallotment option		We have granted the underwriters the option for a period of 30 days following the date of this prospectus to purchase up to additional shares of our common stock at the initial public offering price, less the underwriting discount, for the purpose of covering overallotments, if any.
Voting rights		Each holder of our Class A common stock is entitled to one vote for each share of Class A common stock held on all matters submitted to a vote of our stockholders. Each holder of our Class B common stock is also entitled to one vote for each share of Class B common stock held on all matters submitted to a vote of our stockholders, except for the election and removal of directors. Our stockholders do not have cumulative voting rights. See "Risk Factors—Risks Related to This Offering and Ownership of Our Common Stock."
Use of proceeds		We estimate that our net proceeds from the sale of shares of our common stock in this offering will be approximately $ million, assuming an initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting the estimated underwriting discount and estimated offering expenses payable by us. We intend to use approximately $ million of the net proceeds from this offering to repay indebtedness, and to use any remaining net proceeds from this offering for general corporate purposes. See "Use of Proceeds."
Dividend policy		We do not currently intend to pay dividends on our common stock. Instead, we currently intend to use all of our earnings for the operation and growth of our business and the repayment of indebtedness. See "Dividend Policy."
Risk factors		You should read the section entitled "Risk Factors" beginning on page 13 of, and the other information included in, this prospectus for a discussion of some of the risks and uncertainties you should carefully consider before deciding to invest in our common stock.
Stock exchange symbol		"NMG"

Except as otherwise indicated, all information in this prospectus reflects and assumes the following:

•: the consummation of the Equity Conversion prior to the closing of this offering; and

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•: no exercise by the underwriters of their option to purchase up to an additional shares of our common stock.

The number of shares of our common stock to be outstanding immediately after this offering is based on shares of our common stock outstanding immediately prior to the closing of this offering, and excludes the following:

•: shares of our Class A common stock issuable upon the exercise of stock options granted under the NM Mariposa Holdings, Inc. Management Equity Incentive Plan (the 2013 Management Incentive Plan) and outstanding immediately prior to the closing of this offering, at a weighted average exercise price of $ per share; and
•: shares of our Class A common stock reserved for future issuance under our new 2015 Stock Incentive Plan (the 2015 Stock Incentive Plan and, together with the 2013 Management Incentive Plan, the Stock Incentive Plans), which we intend to adopt prior to the closing of this offering.

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Summary Financial and Other Data

The following tables summarize consolidated financial information of Neiman Marcus Group, Inc. You should read these tables along with "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Business" and our Consolidated Financial Statements and Condensed Consolidated Financial Statements and the related notes included elsewhere in this prospectus. Our historical results are not necessarily indicative of results for any future period and results of operations for interim periods are not necessarily indicative of the results that might be expected for any other interim period or for an entire year.

The results of operations data set forth below for the fiscal years ended July 28, 2012, August 3, 2013 and August 2, 2014 and the balance sheet data set forth below as of August 3, 2013 and August 2, 2014 have been derived from our Consolidated Financial Statements included elsewhere in this prospectus. The results of operations data set forth below for the thirteen weeks ended November 2, 2013 and each of the thirty-nine weeks ended August 2, 2014 and May 2, 2015 and the balance sheet data set forth below as of November 2, 2013, August 2, 2014 and May 2, 2015 have been derived from our Condensed Consolidated Financial Statements included elsewhere in this prospectus. The balance sheet data set forth below as of July 28, 2012 has been derived from our Consolidated Financial Statements not included in this prospectus.

													Fiscal year ended

				Fiscal year ended August 2, 2014(1)			Thirty-nine weeks ended August 2, 2014			Thirteen weeks ended November 2, 2013			Fiscal year ended
	Thirty-nine weeks ended May 2, 2015			Fiscal year ended August 2, 2014(1)			Thirty-nine weeks ended August 2, 2014			Thirteen weeks ended November 2, 2013			August 3, 2013(2)			July 28, 2012
(dollars in millions, except per share data and sales per square foot)	(Successor)			(Combined)			(Successor)			(Predecessor)			(Predecessor)			(Predecessor)
OPERATING RESULTS DATA
Revenues	$	3,928.4		$	4,839.3		$	3,710.2		$	1,129.1		$	4,648.2		$	4,345.4
Cost of goods sold including buying and occupancy costs (excluding depreciation)		2,502.6			3,248.4			2,563.0			685.4			2,995.4			2,794.7
Selling, general and administrative expenses (excluding depreciation)		894.7			1,101.4			835.0			266.4			1,047.8			1,006.9
Income from credit card program		(40.8	)		(55.3	)		(40.7	)		(14.7	)		(53.4	)		(51.6	)
Depreciation and amortization(3)		244.0			307.9			262.0			46.0			188.9			180.2
Operating earnings		299.8			41.0			8.8			32.1			446.4			403.6
Net earnings (loss)		47.8			(147.2	)		(134.1	)		(13.1	)		163.7			140.1
Earnings (loss) per share—basic(4)
Earnings (loss) per share—diluted(4)
Weighted average shares—basic(4)
Weighted average shares—diluted(4)
BALANCE SHEET DATA (at period end)
Total assets		8,871.4						8,761.7						5,300.2			5,201.9
Total liabilities		7,416.7						7,329.1						4,469.2			4,586.3
Long-term debt, excluding current maturities		4,708.6						4,580.5						2,697.1			2,781.9
OTHER DATA
Change in comparable revenues(5)		4.5	%		5.5	%		5.4	%		5.7	%		4.9	%		7.9	%
Number of full-line stores open at period end		43			43			43			43			43			44
Sales per square foot(6)	$	457		$	578		$	440		$	138		$	552		$	535
Percentage of revenues transacted online		25.8	%		23.9	%		24.6	%		21.4	%		22.2	%		20.2	%
Adjusted EBITDA(7)	$	602.7		$	698.4		$	501.3		$	197.2		$	682.7		$	619.5
Adjusted EBITDA as a percentage of revenues		15.3	%		14.4	%		13.5	%		17.5	%		14.7	%		14.3	%
Adjusted Net Earnings(7)	$	161.4		$	169.2		$	101.9		$	67.3		$	224.7		$	195.4
Net capital expenditures(8)		152.5			168.3			132.3			36.0			139.3			142.2
Depreciation expense		136.6			147.6			113.3			34.2			141.5			130.1
Rent expense and related occupancy costs		85.9			103.7			79.6			24.1			96.7			91.9

(1): The presentation of the combined fiscal year ended August 2, 2014 does not comply with GAAP. For more information, see "Basis of Presentation" on page ii of this prospectus. This note also applies to the corresponding information set forth in the tables in note 7 below.
(2): Fiscal year 2013 consists of the fifty-three weeks ended August 3, 2013. All other fiscal years consist of fifty-two weeks. This note also applies to the corresponding information set forth in the tables in note 7 below.
(3): Amounts include incremental depreciation expense arising from fair value adjustments recorded in connection with purchase accounting.
(4): Basic earnings per common share amounts are calculated using the weighted average number of shares of our common stock outstanding for the period, after giving effect to the Equity Conversion. Diluted earnings per common share amounts are calculated using the weighted average

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number of shares of our common stock outstanding for the period and include the dilutive impact of stock options using the treasury stock method, after giving effect to the Equity Conversion.

(5): For more information regarding our calculation of comparable store sales growth, see "Comparable Revenues" on page iii of this prospectus.
(6): Sales per square foot are calculated as net sales of our Neiman Marcus and Bergdorf Goodman full-line stores for the applicable period divided by weighted average square footage. Weighted average square footage includes a percentage of period-end square footage for new and closed stores equal to the percentage of the period during which they were open.
(7): For an explanation of Adjusted EBITDA and Adjusted Net Earnings, see "Non-GAAP Financial Measures" on page iv of this prospectus.

: Adjusted EBITDA is calculated as follows:

												Fiscal year ended

			Fiscal year ended August 2, 2014			Thirty-nine weeks ended August 2, 2014			Thirteen weeks ended November 2, 2013			Fiscal year ended
	Thirty-nine weeks ended May 2, 2015		Fiscal year ended August 2, 2014			Thirty-nine weeks ended August 2, 2014			Thirteen weeks ended November 2, 2013			August 3, 2013(2)		July 28, 2012
(dollars in millions)	(Successor)		(Combined)			(Successor)			(Predecessor)			(Predecessor)		(Predecessor)
Net earnings (loss)	$	47.8	$	(147.2	)	$	(134.1	)	$	(13.1	)	$	163.7	$	140.1
Income tax expense (benefit)		34.1		(81.9	)		(89.8	)		7.9			113.7		88.3
Interest expense, net		217.9		270.1			232.7			37.3			169.0		175.2
Depreciation expense		136.6		147.6			113.3			34.2			141.5		130.1
Amortization of intangible assets and favorable lease commitments		107.4		160.3			148.6			11.7			47.4		50.1

EBITDA	$	543.9	$	348.9		$	270.8		$	78.1		$	635.3	$	583.8
Amortization of inventory step-up(a)		6.8		129.6			129.6			—			—		—
Incremental rent expense(b)		8.2		9.3			8.5			0.8			4.0		4.5
Transaction and other costs(c)		15.1		164.8			55.4			109.4			—		—
Non-cash stock-based compensation		6.4		8.8			6.2			2.5			9.7		6.9
Equity in loss of foreign e-commerce retailer(d)		—		5.1			3.6			1.5			13.1		1.5
Expenses related to cyber-attack(e)		4.1		12.6			12.6			—			—		—
Management fee due to Former Sponsors(f)		—		2.8			—			2.8			10.0		10.0
Expenses incurred in connection with openings of new stores/remodels of existing stores(g)		9.3		5.8			4.0			1.8			5.1		6.6
Other non-recurring expenses(h)		8.8		10.7			10.5			0.2			5.4		6.2

Adjusted EBITDA(i)	$	602.7	$	698.4		$	501.3		$	197.2		$	682.7	$	619.5

: Adjusted Net Earnings are calculated as follows:

												Fiscal year ended

			Fiscal year ended August 2, 2014			Thirty-nine weeks ended August 2, 2014			Thirteen weeks ended November 2, 2013			Fiscal year ended
	Thirty-nine weeks ended May 2, 2015		Fiscal year ended August 2, 2014			Thirty-nine weeks ended August 2, 2014			Thirteen weeks ended November 2, 2013			August 3, 2013		July 28, 2012
(dollars in millions)	(Successor)		(Combined)			(Successor)			(Predecessor)			(Predecessor)		(Predecessor)
Net earnings (loss)	$	47.8	$	(147.2	)	$	(134.1	)	$	(13.1	)	$	163.7	$	140.1
Pre-tax adjustments to eliminate impact of purchase accounting:
Amortization of inventory step-up(a)		6.8		129.6			129.6			—			—		—
Amortization of intangible assets		107.4		160.3			148.6			11.7			47.4		50.1
Incremental depreciation charges on step-up in property & equipment(j)		20.5		10.5			9.1			1.5			5.5		5.2
Incremental rent expense(b)		8.2		9.3			8.5			0.8			4.0		4.5
Transaction and other costs(c)		15.1		164.8			55.4			109.4			—		—
Other pre-tax adjustments:
Non-cash stock-based compensation		6.4		8.8			6.2			2.5			9.7		6.9
Equity in loss of foreign e-commerce retailer(d)		—		5.1			3.6			1.5			13.1		1.5
Expenses related to cyber-attack(e)		4.1		12.6			12.6			—			—		—
Management fee due to Former Sponsors(f)		—		2.8			—			2.8			10.0		10.0
Expenses incurred in connection with openings of new stores/remodels of existing stores(g)		9.3		5.8			4.0			1.8			5.1		6.6
Other non-recurring expenses(h)		8.8		10.7			10.5			0.2			5.4		6.2

Total pre-tax adjustments		186.8		520.4			388.2			132.3			100.3		91.0
Tax impact of adjustments(k)		73.2		204.0			152.2			51.9			39.3		35.7

Adjustments to net earnings (loss), net of tax		113.6		316.4			236.0			80.4			61.0		55.3

Adjusted Net Earnings(i)	$	161.4	$	169.2		$	101.9		$	67.3		$	224.7	$	195.4

(a): The carrying values of inventories acquired in connection with the Acquisition and the acquisition of MyTheresa were stepped up to estimated fair value as of the respective acquisition dates and amortized into cost of goods sold as the acquired inventories were sold.
(b): Rental obligations and deferred real estate credits were revalued at fair value in connection with the Acquisition. These fair value adjustments increase post-acquisition rent expense.

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(c): Amounts relate to costs and expenses incurred in connection with the Acquisition and the acquisition of MyTheresa.
(d): Amounts relate to our equity in losses incurred in connection with our prior non-controlling investment in a foreign e-commerce retailer. See Note 14 of the Notes to Consolidated Financial Statements.
(e): For a further description of the cyber-attack, see "Risk Factors—Risks Related to Our Business and Industry—A breach in information privacy could negatively impact our operations" and Note 14 of the Notes to Consolidated Financial Statements.
(f): Amounts represent management fees paid to the Former Sponsors (as defined below) prior to the Acquisition. See "Certain Relationships and Related Party Transactions."
(g): Amounts represent direct and incremental expenses incurred in connection with the openings of new stores as well as remodels to our existing stores.
(h): Amounts consist primarily of expenses incurred in connection with NMG One and non-recurring settlements of class action litigation claims.
(i): Further details of Adjusted EBITDA and Adjusted Net Earnings are as follows:

	Last twelve months ended May 2, 2015		Thirty-nine weeks ended May 3, 2014

Adjusted EBITDA	$	714.0	$	587.1
Adjusted Net Earnings		160.2		170.5

(j): The carrying values of our property and equipment acquired in connection with the Acquisition and the acquisition of MyTheresa were stepped up to estimated fair value as of the respective acquisition dates. These fair value adjustments are being depreciated over the useful lives of the acquired property and equipment.
(k): Tax effect of adjustments to net earnings (loss) at our incremental tax rate of 39.2%.

(8): Amounts are net of developer contributions of $30.5 million, $5.7 million, $5.7 million, $0.0 million, $7.2 million and $10.6 million, respectively, for the periods presented.

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RISK FACTORS

This offering and investing in our common stock involve a high degree of risk. You should carefully consider the risks and uncertainties described below, as well as the other information contained in this prospectus, including our Consolidated Financial Statements and Condensed Consolidated Financial Statements and the related notes included elsewhere in this prospectus, before deciding to invest in our common stock. The risks described below are not the only risks facing us. Additional risks and uncertainties not currently known to us or those we currently deem to be immaterial may also materially and adversely affect our business, financial condition or results of operations. Any of the following risks could adversely affect our business, financial condition or results of operations, in which case the trading price of our common stock could decline and you could lose all or part of your investment.

Risks Related to Our Business and Industry

Economic conditions may negatively impact consumer spending and demand for our merchandise.

We sell luxury retail merchandise. Purchases of merchandise by our customers are discretionary, and therefore highly dependent upon the level of consumer spending, particularly among affluent customers. A number of factors affect the level of consumer spending on our merchandise, and in turn our revenues and comparable revenues, including:

•: general economic and industry conditions, including inflation, deflation, changes related to interest rates, rates of economic growth, current and expected unemployment levels and government fiscal and monetary policies;
•: the performance of the financial, equity and credit markets;
•: consumer disposable income levels, consumer confidence levels, the availability, cost and level of consumer debt and consumer behaviors towards incurring and paying debt;
•: changes in prices for commodities and energy, including fuel; and
•: current and expected tax rates and policies.

During an actual or perceived economic downturn, fewer customers may shop with us and those who do shop may limit the amounts of their purchases. Deterioration in domestic and global economic conditions leading to reductions in consumer spending have had a significant adverse impact on our business in the past. While economic conditions have improved since the severe downturn we experienced in calendar years 2008 and 2009, domestic and global economic conditions remain volatile, and there can be no assurance that the economy will continue to improve. The recurrence of adverse economic conditions could have an adverse effect on our business, financial condition and results of operations.

If we fail to anticipate, identify and respond effectively to changing consumer demands, fashion trends and consumer shopping preferences, our business, financial condition and results of operations may be adversely affected.

Our success depends in large part on our ability to identify fashion trends and consumer shopping preferences, and to anticipate, identify and react effectively to rapidly changing consumer demands in a timely manner. We make decisions regarding the purchase of our merchandise well in advance of the season in which it will be sold. For example, women's apparel, men's apparel, shoes and handbags are typically ordered six to nine months in advance of the date the merchandise will be offered for sale, while jewelry and other categories are typically ordered three to six months in advance of such date.

If our sales during any season are significantly lower than we anticipated, we may not be able to adjust our expenditures for inventory and other expenses in a timely fashion and may be left with

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unsold inventory. If that occurs, we may be forced to rely on markdowns or promotional sales to dispose of excess inventory, which could have an adverse effect on our gross margins and results of operations. Conversely, if we fail to purchase a sufficient quantity of merchandise, we may not have an adequate supply of merchandise to meet consumer demand, thereby causing us to lose sales opportunities or adversely affect our customer relationships. Any failure on our part to anticipate, identify and respond effectively to these changes could adversely affect our business, financial condition and results of operations.

The luxury retail industry is highly competitive.

The luxury retail industry is highly competitive and fragmented. We compete for customers with luxury and premium multi-branded retailers, designer-owned proprietary boutiques, specialty retailers, national apparel chains, individual specialty apparel stores, pure-play online retailers and "flash sale" businesses, which primarily sell out-of-season products. Many of our competitors have greater financial resources than we do.

We face strong competition to attract new customers, maintain relationships with existing customers and obtain merchandise from key designers. We compete for customers principally on the basis of quality and fashion, customer service, value, assortment and presentation of merchandise, marketing and customer loyalty programs and store and online ambiance. Our failure to compete successfully based on these and other factors may have an adverse effect on our results of operations and cause us to lose market share to our competitors.

A number of other competitive factors could have an adverse effect on our business, financial condition and results of operations, including:

•: competitive pricing strategies, including discounting of prices and/or the discounting or elimination of revenues collected for services;
•: expansion of product or service offerings by existing competitors;
•: entry by new competitors into markets and channels in which we currently operate;
•: alteration of the distribution channels used by designers for the sale of their goods to consumers; and
•: adoption by existing competitors of innovative retail sales methods.

We may not be able to continue competing successfully with our existing or new competitors, and prolonged periods of deep discount pricing by our competitors may have a material adverse effect on our business, financial condition and results of operations.

We focus on providing a seamless, cohesive and high-quality experience through our omni-channel retail model, and our failure to successfully execute our plans could adversely affect our business, financial condition and results of operations.

With the expansion of the integrated omni-channel retail model, including through the implementation of NMG One, we believe our overall business has become and will continue to become more complex. These changes have forced us to develop new expertise in response to the new challenges, risks and uncertainties inherent in the delivery of an integrated omni-channel retailing model. As we execute our plans and continue to evolve and transform our strategy, we may not adequately manage the related organizational changes to align with our strategy, make investments at the right time or pace or in the right manner, or appropriately monitor, report or communicate the changes in an effective manner. In addition, although we continually analyze trends in the way our customers shop, as well as the relationships between our stores and online offerings to maximize incremental sales, we may not gather accurate and relevant data or effectively utilize that data, which

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may impact our strategic planning and decision making. If we do not properly allocate our capital between the store and online environment, or adapt our store operations to the integrated omni-channel retail model, our competitive position and overall sales and profitability could suffer.

We depend on the success of our advertising and marketing programs.

Our business depends on attracting an adequate volume of customers who are likely to purchase our merchandise. We have a significant number of marketing initiatives and regularly fine-tune our approach and adopt new ones. However, there can be no assurance that we will be able to effectively execute our advertising and marketing programs in the future, and any failure to do so could adversely affect our business, financial condition and results of operations.

Our InCircle loyalty program is designed to cultivate long-term relationships with our customers and enhance the quality of service we provide to our customers. We must constantly monitor and update the terms of this loyalty program so that it continues to meet the demands and needs of our customers and remain competitive with loyalty programs offered by other luxury and premium multi-branded retailers. Approximately 40% of our total revenues in fiscal year 2014 were generated by our InCircle loyalty program members who achieved reward status. If our InCircle loyalty program were to fail to provide competitive rewards and quality service to our customers, our business and results of operations could be adversely affected.

Our business depends significantly on the success of the expansion and growth of our retail stores, which are subject to numerous risks, some of which are beyond our control.

The success of our business is dependent on our ability to develop and execute our growth strategies. Our continued growth depends on our successful development, opening and operation of new stores. Successful execution of this strategy depends upon a number of factors, including our ability to identify suitable sites for new stores, negotiate and execute leases on acceptable terms, construct, furnish and supply a store in a timely and cost effective manner, accurately assess the demographic or retail environment at a given location, hire and train qualified personnel, obtain necessary permits and zoning approvals, obtain commitments from a core group of vendors to supply a new store, integrate a new store into our distribution network and build customer awareness and loyalty. Our new stores are typically large-scale construction projects that are subject to numerous risks. Construction costs may exceed our original estimates due to increases in materials, labor or other costs, and we may experience permitting or construction delays, which may further increase project costs and delay projected sales. These risks may be exacerbated to the extent we engage third party developers or contractors in connection with such projects or are subject to approvals of regulatory bodies to complete the projects. For example, the Shops at Hudson Yards project is a significant, multi-year development project managed by a third party and we cannot assure you that the project, including the full-line Neiman Marcus store, will be completed within the timeframe or budget that we currently contemplate. As each new store represents a significant investment of capital, time and other resources, delays or failures in opening new stores, or achieving lower than expected sales in new stores, could materially and adversely affect our growth.

Our growth strategies may also lead us to expand into additional geographical markets in the future, either by opening new stores or through acquisitions. These markets may have different competitive conditions, consumer trends and discretionary spending patterns than our existing markets, which may cause our operations in these markets to be less successful than in our existing markets.

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If we are unable to successfully maintain a relevant and reliable omni-channel experience for our customers, our financial performance and brand image could be adversely affected.

As an omni-channel retailer, increasingly we interact with our customers across a variety of different channels, including in-store, online, mobile technologies, and social media. Our customers are increasingly using tablets and mobile phones to make purchases online and facilitate purchasing decisions when in our stores. Our customers also engage with us online by providing feedback and public commentary about all aspects of our business. Omni-channel retailing is rapidly evolving, and our success depends on our ability to anticipate and implement innovations in customer experience and logistics to appeal to customers who increasingly rely on multiple channels to meet their shopping needs. If for any reason we are unable to implement our omni-channel initiatives, provide a convenient and consistent experience for our customers across all channels or provide our customers the products they want, when and where they want them, our financial performance and brands could be adversely affected.

We are also vulnerable to certain additional risks and uncertainties associated with our e-commerce websites, including changes in required technology interfaces, website downtime and other technical failures, internet connectivity issues, costs and technical issues as we upgrade our website software, computer viruses, changes in applicable federal and state regulations, security breaches and consumer privacy concerns. In addition, we must keep up to date with competitive technology trends, including the use of new or improved technology, evolving creative user interfaces and other e-commerce marketing trends such as paid search, re-marketing and the proliferation of mobile usage, among others, which may increase our costs and which may not succeed in increasing sales or attracting customers. Our failure to successfully respond to these risks and uncertainties could adversely affect the sales or margins in our e-commerce business, as well as damage our reputation and brands.

Our business and performance may be adversely affected by the significant costs associated with our expansion and growth strategies.

We intend to make significant ongoing investments to support our growth strategies. For example, we make capital investments in our new and existing stores, websites, omni-channel model (including in connection with NMG One) and distribution and support facilities, as well as in information technology, and incur expenses for headcount, advertising and marketing, professional fees and other costs in support of our growth initiatives. The amounts of such investments, expenses and costs are often difficult to predict because they require us to anticipate our customers' needs, our needs as we grow, trends within our industry and our competitors' actions. If we fail to accurately predict the amounts of these investments, expenses and costs, our results of operations could be adversely affected.

For example, we routinely evaluate the need to expand and/or remodel our existing stores. In undertaking store expansions or remodels, we must complete the expansion or remodel in a timely, cost-effective manner, minimize disruptions to our existing operations and succeed in creating an improved shopping environment. In addition, new store openings involve the risks described under "Our business depends significantly on the expansion and growth of our retail stores, which are subject to numerous risks, some of which are beyond our control."

Failure to execute on these or other aspects of our store growth strategies in a cost-effective manner could adversely affect our revenues and results of operations.

Investments and partnerships in new business strategies and acquisitions could impact our business, financial performance and results of operations.

We may, from time to time, acquire other businesses, such as our acquisition of MyTheresa in October 2014, or make other investments in businesses or partnerships, which would subject us to additional associated risks, including the integration of operations and personnel, the achievement of

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any expected operational, branding and other synergies, and the diversion of management resources to effect and implement acquisitions. These acquisitions and investments may not perform as expected or cause us to assume liabilities unrecognized or underestimated in due diligence. In addition, we may be unable to retain key employees in any business we acquire, we may experience difficulty integrating any businesses we acquire, and any such acquisitions may result in the diversion of our capital and our management's attention from other business issues and opportunities, any of which could harm our business, financial performance and results of operations.

A significant portion of our revenue is from our stores in four states, which exposes us to downturns or catastrophic occurrences in those states.

Our stores located in California, Florida, New York and Texas together represented approximately 50% of our revenues in fiscal year 2014. As a result, we are more vulnerable to conditions in those states, particularly the major metropolitan areas in those states, than our more geographically diversified competitors. Any unforeseen events or circumstances that negatively affect those states could materially adversely affect our revenues and profitability. These factors include, among other things, changes in demographics, population and employee bases, wage increases, changes in economic conditions, severe weather conditions and other catastrophic occurrences. Such conditions may result in reduced customer traffic and spending in our stores, physical damage to our stores, loss of inventory, closure of one or more of our stores, inadequate work force in our markets, temporary disruption in the supply of merchandise, delays in the delivery of merchandise to our stores and a reduction in the availability of merchandise in our stores. Any of these factors may disrupt our business and materially adversely affect our business, financial condition and results of operations.

We are dependent on our relationships with certain designers, vendors and other sources of merchandise.

Our relationships with established and emerging designers are a key factor in our success as a luxury merchandise retailer because sales of designer merchandise represent a substantial portion of our revenues. Many of our key vendors limit the number of retail channels they use to sell their merchandise, and we have no guaranteed supply arrangements with our principal sources of merchandise. In addition, nearly all of our top designer brands are sold by competing retailers and have their own proprietary retail stores and/or websites. Accordingly, there can be no assurance that any of such sources or designers will continue to sell to us or meet our quality, style and volume requirements.

If one or more of our top designers were to (i) limit the supply of merchandise made available to us for resale on a wholesale basis or otherwise, (ii) increase the supply of merchandise made available to our competitors, (iii) increase the supply of merchandise made available to their own proprietary retail stores and websites or significantly increase the number of their proprietary retail stores, (iv) convert the distribution of merchandise made available to us from a wholesale arrangement to a concession arrangement (whereby the designer merchandises its boutique within our store and pays us a pre-determined percentage of the revenues derived from the sale of such merchandise) or (v) cease the wholesale distribution of their merchandise to retailers, our business could be adversely affected. Any decline in the quality or popularity of our top designer brands could also adversely affect our business.

During periods of adverse changes in general economic, industry or competitive conditions, some of our designers and vendors may experience serious cash flow issues, reductions in available credit from banks, factors or other financial institutions, or increases in the cost of capital. In response, such designers and vendors may attempt to increase their prices, alter historical credit and payment terms available to us or take other actions. Any of these actions could have an adverse impact on our relationship with such designers or vendors, or constrain the amounts or timing of our purchases from such designers or vendors, and, ultimately, have an adverse effect on our revenues, results of operations and liquidity.

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A breach in information privacy could negatively impact our operations.

The protection of our customer, employee and company data is critically important to us. We utilize customer data captured through both our proprietary credit card programs and our in-store and online activities. Our customers have a high expectation that we will adequately safeguard and protect their personal information. Despite our security measures, our information technology and infrastructure may be vulnerable to criminal cyber-attacks or security incidents due to employee error, malfeasance or other vulnerabilities. Any such incident could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. In addition, we outsource certain functions, such as customer communication platforms and credit card transaction processing, and these relationships allow for the storage and processing of customer information by third parties, which could result in security breaches impacting our customers.

We discovered in January 2014 that malicious software (malware) was clandestinely installed on our computer systems (the Cyber-Attack). Based on information from our forensic investigation, it appears that the malware actively attempted to collect payment card data from July 16, 2013 through October 30, 2013 at 77 of our 85 stores, on different dates at each store within this time period. During that time period, information from approximately 370,000 customer payment cards could have been potentially collected by the malware.

We have been cooperating with the U.S. Secret Service in its investigation into the Cyber-Attack. In testimony before Congress in February 2014, a Secret Service official explained that the attack on our systems was exceedingly sophisticated, and was unprecedented in the manner in which it was customized to defeat our defenses and remain undetected. The Secret Service official also testified that we used a robust security plan to protect customer data, but that, given its level of sophistication, the attacker nevertheless succeeded in having malware operate on our systems.

In light of the Cyber-Attack, we have taken steps to further strengthen the security of our computer systems, and continue to assess, maintain and enhance the ongoing effectiveness of our information security systems. Nevertheless, there can be no assurance that we will not suffer a similar criminal attack in the future, that unauthorized parties will not gain access to personal information, or that any such incident will be discovered in a timely way. In particular, the techniques used by criminals to obtain unauthorized access to sensitive data change frequently and often are not recognized until launched against a target; accordingly, we may be unable to anticipate these techniques or implement adequate preventative measures.

As described in "Management's Discussion and Analysis of Financial Condition and Results of Operations," we incurred costs in fiscal year 2014 associated with the Cyber-Attack, including legal fees, investigative fees, costs of communications with customers and credit monitoring services. In the future, payment card companies and associations may require us to reimburse them for unauthorized card charges and costs to replace cards and may also impose fines or penalties in connection with the Cyber-Attack, and federal and state enforcement authorities may also impose fines or other remedies against us. We expect to incur additional costs to investigate and remediate the matter in the foreseeable future. Such costs are not currently estimable but could be material to our future results of operations.

As described in "Business—Legal Proceedings—Cyber-Attack Class Actions Litigation" and Note 15 of the Notes to Consolidated Financial Statements, the Cyber-Attack has given rise to putative class action litigation on behalf of customers and regulatory investigations. At this point, we are unable to predict the developments in, outcome of, and economic and other consequences of pending or future litigation or government inquiries related to this matter. Any future criminal cyber-attack or data security incident may result in additional regulatory investigations, legal proceedings or liability under laws that protect the privacy of personal information, all of which may damage our reputation and relationships with our customers and adversely affect our business, financial condition and results of operations.

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A material disruption in our information systems could adversely affect our business or results of operations.

We rely on our information systems to process transactions, summarize our results of operations and manage our business. The reliability and capacity of our information systems is critical to our operations and the implementation of our growth initiatives. Our information systems are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, cyber-attack or other security breaches and catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes, acts of war or terrorism and usage errors by our employees. If our information systems are damaged or cease to function properly, we may have to make a significant investment to fix or replace them, and we may suffer losses of critical data and/or interruptions or delays in our operations. To keep pace with changing technology, we must continuously implement new information technology systems as well as enhance our existing systems. Moreover, the successful execution of some of our growth strategies, in particular the expansion of our omni-channel and online capabilities, is dependent on the design and implementation of new systems and technologies and/or the enhancement of existing systems, such as our ongoing implementation of NMG One. Any material disruption in our information systems, or delays or difficulties in implementing or integrating new systems or enhancing or expanding current systems, could have an adverse effect on our business, in particular our online operation, and results of operations.

Our continued success is substantially dependent on positive perceptions of our company, which, if eroded, could adversely affect our customer and employee relationships.

We have a reputation associated with a high level of integrity, customer service and quality merchandise, which is one of the reasons customers shop with us and employees choose us as a place of employment. To be successful in the future, we must continue to preserve, grow and leverage the value of our reputation. Reputational value is based in large part on perceptions. While reputations may take decades to build, negative incidents, including actions taken by our business partners, can quickly erode trust and confidence, particularly if they result in adverse mainstream and social media publicity, governmental investigations or litigation. Any significant damage to our reputation could negatively impact sales, diminish customer trust, reduce employee morale and productivity and lead to difficulties in recruiting and retaining qualified employees.

Conditions in the countries where we source our merchandise and international trade conditions could adversely affect us.

A substantial majority of our merchandise is manufactured overseas, mostly in Europe and, to a lesser extent, China, Mexico and South America, and delivered to us by our vendors as finished goods. As a result, political or financial instability, labor strikes, natural disasters or other events resulting in the disruption of trade or transportation from other countries or the imposition of additional regulations relating to foreign trade could cause significant delays or interruptions in the supply of our merchandise or increase our costs, either of which could have an adverse effect on our business. If we are forced to source merchandise from other countries, such merchandise might be more expensive or of a different or inferior quality from the merchandise we now sell. If we were unable to adequately replace the merchandise we currently source with merchandise produced elsewhere, our business could be adversely affected.

Our business is affected by foreign currency fluctuations and inflation.

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relative to such currencies. Changes in the value of the U.S. dollar relative to foreign currencies may impact the retail prices of merchandise offered for sale and/or our cost of goods sold. Weakening foreign currency exchange rates may create disincentives to, or changes in the pattern, practice or frequency of, travel to and spending by foreign tourists in the regions in which we operate our retail stores. Also, a strengthening U.S. dollar may impact U.S. consumers' willingness or ability to travel abroad and purchase merchandise we offer for sale at lower prices from foreign retailers. Any of these effects could cause our revenues or product margins to decrease.

We have also experienced certain inflationary effects in our cost base due to increases in selling, general and administrative expenses, particularly with regard to employee health care and other benefits, and increases in fuel prices, which impact freight and transportation costs. Inflation can harm our margins and profitability if we are unable to increase prices or cut costs to offset the effects of inflation in our cost base.

Economic, political and other risks associated with our international operations could adversely affect our revenues and international growth prospects.

As part of our business strategy, we intend to increase our sales outside the United States. We have limited experience operating overseas subsidiaries and managing non-U.S. employees and, as a result, may encounter cultural challenges with local practices and customs that may result in harm to our reputation and the value of our brands. Our international revenues are subject to a number of risks inherent to operating in foreign countries, and any expansion of our international operations will increase the effects of these risks. These risks include: (i) political, economic and civil instability of foreign markets (including acts of terrorism); (ii) foreign governments' restrictive trade policies; (iii) sudden policy changes by foreign agencies or governments; (iv) the imposition of, or increase in, duties, taxes, government royalties or non-tariff trade barriers; (v) difficulty in collecting international accounts receivable and potentially longer payment cycles; (vi) restrictions on repatriation of cash and investments in operations in certain countries; (vii) problems entering international markets with different cultural bases and consumer preferences; (viii) labor unrest in foreign markets; (ix) compliance with laws and regulations applicable to international operations, such as the Foreign Corrupt Practices Act and regulations promulgated by the Office of Foreign Asset Control; and (x) operating in new, developing or other markets in which there are significant uncertainties regarding the interpretation, application and enforceability of laws and regulations relating to contract and intellectual property rights. Any of these risks could have a material adverse effect on our international operations and our growth strategy.

We outsource certain business processes to third-party vendors, which subjects us to risks, including disruptions in our business and increased costs.

We outsource certain technology-related processes to third parties. These include credit card authorization and processing, insurance claims processing, payroll processing, record keeping for retirement and benefit plans and certain information technology functions. In addition, we depend on third-party vendors for delivery of our merchandise from manufacturers and to our customers. We review outsourcing alternatives on a regular basis and may decide to outsource additional processes in the future. If third-party providers fail to meet our performance standards and expectations, including with respect to data security, our reputation, sales and results of operations could be adversely affected. In addition, we could face increased costs associated with finding replacement vendors or hiring new employees to provide these services in-house.

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The loss of senior management or attrition among our buyers or key sales associates could adversely affect our business.

Our success in the global luxury merchandise industry is dependent on our senior management team, buyers and key sales associates. We rely on the experience of our senior management, and their knowledge of our business and industry would be difficult to replace. If we were to lose a portion of our buyers or key sales associates, our ability to benefit from long-standing relationships with key designers or to provide relationship-based customer service could suffer. We may not be able to retain our current senior management team, buyers or key sales associates and the loss of any of these individuals could adversely affect our business. We do not maintain key person insurance on any employee.

Our business may be adversely affected by union activities.

Certain employees of our Bergdorf Goodman stores, representing less than 1% of our total employees, are subject to a collective bargaining agreement. We may experience pressure from labor unions or become the target of campaigns similar to those faced by our competitors, and the unionization of a more significant portion of our workforce could increase the overall costs at the affected locations and adversely affect our flexibility to run our business competitively and otherwise adversely affect our business, financial condition and results of operations.

Changes in our credit card arrangements and regulations with respect to those arrangements could adversely impact our business.

We maintain a proprietary credit card program through which credit is extended to customers and have a related marketing and servicing alliance with affiliates of Capital One Financial Corporation (Capital One). Pursuant to an agreement with Capital One (the Program Agreement), Capital One currently offers credit cards and non-card payment plans under both the "Neiman Marcus" and "Bergdorf Goodman" brand names. Also, we receive payments from Capital One based on sales transacted on our proprietary credit cards. We may receive additional payments based on the profitability of the portfolio as determined under the Program Agreement depending on a number of factors, including credit losses. In addition, we receive payments from Capital One for marketing and servicing activities we provide to Capital One. The Program Agreement terminates in July 2020 (renewable thereafter for three-year terms), subject to early termination provisions.

In connection with the Program Agreement, we have changed and may continue to change the terms of credit offered to our customers. In addition, Capital One has discretion over certain policies and arrangements with credit card customers and may change these policies and arrangements in ways that affect our relationships with these customers. Moreover, changes in credit card use, payment patterns and default rates may result from a variety of economic, legal, social and other factors that we cannot control or predict with certainty. Any such changes in our credit card arrangements may adversely affect our credit card program and, ultimately, our business.

Credit card operations such as our proprietary program through Capital One are subject to numerous federal and state laws that impose disclosure and other requirements upon the origination, servicing and enforcement of credit accounts and limitations on the maximum amount of finance charges that may be charged by a credit provider such as the Credit Card Accountability Responsibility and Disclosure Act of 2009 (the CARD Act) and the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act). The CARD Act included new and revised rules and restrictions on credit card pricing, finance charges and fees, customer billing practices and payment application. The Dodd-Frank Act was enacted in July 2010 and increased the regulatory requirements affecting providers of consumer credit. These changes significantly restructured regulatory oversight and other aspects of the financial industry, created a new federal agency to supervise and enforce consumer

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lending laws and regulations and expanded state authority over consumer lending. We anticipate more regulation and interpretations of the new rules to continue, and, depending on the nature and extent of these new regulations and interpretations, we may be required to make changes to our credit card practices and systems. Any regulation or change in the regulation of credit arrangements, pursuant to the CARD Act, the Dodd-Frank Act or otherwise, that would materially limit the availability of credit to our customer base could adversely affect our business.

We are subject to risks associated with owning and leasing substantial amounts of real estate.

We own or lease substantial amounts of real estate, primarily our retail stores and office facilities, and many of the stores we own are subject to ground leases or operating covenants. Accordingly, we are subject to all of the risks associated with owning and leasing real estate. In particular, the value of the relevant assets could decrease, or costs to operate stores could increase, in either case because of changes in the supply or demand of available store locations, demographic trends or the overall investment climate for real estate. Pursuant to the operating covenants in certain of our leases, we could be required to continue to operate a store that no longer meets our performance expectations, requirements or current operating strategies. The terms of our real estate leases, including renewal options, range from two to 130 years. We believe that we have been able to lease real estate on favorable terms, but there is no guarantee that we will be able to continue to negotiate these terms in the future. If we are not able to enter into new leases or renew existing leases on terms acceptable to us, our business and results of operations could be adversely affected.

Our ability to timely deliver merchandise to our stores and customers is dependent on a limited number of distribution facilities. The loss of, or disruption in, one or more of our distribution facilities could adversely affect our business and operations.

We operate a limited number of distribution facilities. Our ability to meet the needs of our retail stores and online operations depends on the proper operation of these distribution facilities. Although we believe that we have appropriate contingency plans, unforeseen disruptions in operations due to freight difficulties, strikes, fire, weather conditions, natural disasters or for any other reason may result in the loss of inventory and/or delays in the delivery of merchandise to our stores and customers. In such an event, our customers may decide to purchase merchandise from our competitors instead of from us. In addition, we could incur higher costs and longer lead times associated with the distribution of our merchandise during the time it takes to reopen or replace a damaged facility. Any of the foregoing factors could adversely affect our business, financial condition and results of operations.

Our business may be adversely affected by catastrophic events and extreme or unseasonable weather conditions.

Unforeseen events, including war, terrorism and other international conflicts, public health issues and natural disasters such as earthquakes, hurricanes or tornadoes, whether occurring in the United States or abroad, could disrupt our supply chain operations, international trade or result in political or economic instability. Any of the foregoing events could result in property losses, reduce demand for our merchandise or make it difficult or impossible to obtain merchandise from our suppliers.

Extreme weather conditions in the areas in which our stores are located, particularly in markets where we have multiple stores, could adversely affect our business. For example, heavy snowfall, rainfall or other extreme weather conditions over a prolonged period might make it difficult for our customers to travel to our stores and thereby reduce our sales and profitability. Our business is also susceptible to unseasonable weather conditions. For example, extended periods of unseasonably warm temperatures during the winter season or cool weather during the summer season could render a portion of our inventory incompatible with those unseasonable conditions. Reduced sales from extreme or prolonged unseasonable weather conditions could adversely affect our business.

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Our failure to comply with, or developments in, laws, rules or regulations could affect our business or results of operations.

We are subject to customs, anti-corruption laws, truth-in-advertising, intellectual property, labor and other laws, including consumer protection regulations, credit card regulations, environmental laws and zoning and occupancy ordinances that regulate retailers generally and/or govern the importation, promotion and sale of merchandise, regulate wage and hour matters with respect to our employees and govern the operation of our retail stores and warehouse facilities. Although we undertake to monitor our compliance with and developments in these laws, rules and regulations, if these laws are violated by us or our importers, designers, manufacturers, distributors or other business partners, or if the interpretation of these laws, rules or regulations changes, we could experience delays in shipments and receipt of merchandise, suffer damage to our reputation or be subject to fines or other penalties under the controlling regulations, any of which could adversely affect our business or results of operations.

Our Pension Plan funding could increase at a higher than anticipated rate.

Significant changes in interest rates, decreases in the fair value of assets of our Pension Plan (as defined below) and investment losses on plan assets could affect the funded status of our Pension Plan and could increase future funding requirements of our Pension Plan. A significant increase in future funding requirements could have a negative impact on our cash flows, financial condition or results of operations.

If we are unable to enforce our intellectual property rights, if we are accused of infringing a third party's intellectual property rights, or if the merchandise we purchase from vendors is alleged to have infringed a third party's intellectual property rights, our business or results of operations may be adversely affected.

Our future success and competitive position depend in part on our ability to maintain and protect our brand. We and our subsidiaries currently own various intellectual property rights in the United States and in various foreign jurisdictions, including our trademarks, tradenames and service marks, such as the "Neiman Marcus," "Bergdorf Goodman" and "mytheresa" marks, that differentiate us from our competitors. We currently rely on a combination of copyright, trademark, trade dress and unfair competition laws to establish and protect our intellectual property and other proprietary rights, but the steps we take to protect such rights may be inadequate to prevent infringement of our trademarks and proprietary rights by others. Such unauthorized use of our trademarks, trade secrets, or other proprietary rights may cause significant damage to our brand and have an adverse effect on our business. In addition, the laws of some foreign countries do not protect proprietary rights to the same extent as do the laws of the United States and there can be no assurance that we are adequately protected in all countries or that we will prevail when defending our trademark or proprietary rights. The loss or reduction of any of our significant intellectual property or proprietary rights could have an adverse effect on our business.

Additionally, third parties may assert claims against us alleging infringement, misappropriation or other violations of their intellectual property or other proprietary rights, whether or not the claims have merit. Such claims could be time consuming and expensive to defend and may divert management's attention and resources. This could have an adverse effect on our business or results of operations and cause us to incur significant litigation costs and expenses. In addition, resolution of such claims may require us to cease using the relevant intellectual property or other rights or selling the allegedly infringing products, or to license rights from third parties.

We purchase merchandise from vendors that may incorporate protected intellectual property, and we do not independently investigate whether these vendors legally hold intellectual property rights to merchandise that they are manufacturing or distributing. As a result, we rely upon the vendors' representations and indemnifications set forth in our purchase orders and supplier agreements

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concerning their right to sell us the products that we purchase from them. If a third party claims to have rights with respect to merchandise we purchased from a vendor, or if we acquire unlicensed merchandise, we could be obligated to remove such merchandise from our stores, incur costs associated with destruction of such merchandise if the distributor or vendor is unwilling or unable to reimburse us and be subject to liability under various civil and criminal causes of action, including actions to recover unpaid royalties and other damages and injunctions. Any of these results could harm our brand image and have a material adverse effect on our business and growth.

Claims under our insurance plans and policies may differ from our estimates, which could adversely affect our results of operations.

We use a combination of insurance and self-insurance plans to provide for potential liabilities for workers' compensation, general liability, business interruption, property and directors' and officers' liability insurance, vehicle liability and employee health-care benefits. Our insurance coverage may not be sufficient, and any insurance proceeds may not be timely paid to us. In addition, liabilities associated with the risks that are retained by us are estimated, in part, by considering historical claims experience, demographic factors, severity factors and other actuarial assumptions, and our business, financial condition and results of operations may be adversely affected if such assumptions are incorrect.

Our high level of fixed lease obligations could adversely affect our business, financial condition and results of operations.

Our high level of fixed lease obligations will require us to use a significant portion of cash generated by our operations to satisfy these obligations and could adversely affect our ability to obtain future financing to support our growth or other operational investments. We will require substantial cash flows from operations to make our payments under our operating leases, which in some cases provide for periodic adjustments in our rent rates. If we are not able to make the required payments under the leases, the owners of or lenders with a security interest in the relevant stores, distribution centers or administrative offices may, among other things, repossess those assets, which could adversely affect our ability to conduct our operations. In addition, our failure to make payments under our operating leases could trigger defaults under other leases or under agreements governing our indebtedness, which could cause the counterparties under those agreements to accelerate the obligations due thereunder.

Risks Related to our Indebtedness

Our substantial indebtedness could adversely affect our business, financial condition and results of operations and our ability to fulfill our obligations with respect to such indebtedness.

As of May 2, 2015, the principal amount of our total indebtedness was approximately $4.7 billion, and we had unused commitments under our Asset-Based Revolving Credit Facility (as defined below) available to us of $660.0 million, subject to a borrowing base.

The existence and terms of our substantial indebtedness could adversely affect our business, financial condition and results of operations by:

•: making it more difficult for us to satisfy our obligations with respect to our indebtedness;
•: limiting our ability to incur, or guarantee, additional indebtedness or obtain additional financing to fund future working capital, capital expenditures, acquisitions, execution of our business and growth strategies or other general corporate requirements;
•: requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for working

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capital, capital expenditures, acquisitions and other general corporate purposes and future growth;

•: limiting our ability to pay dividends or make other distributions in respect of, or repurchase or redeem, capital stock;
•: increasing our vulnerability to general adverse economic, industry and competitive conditions and government regulations;
•: exposing us to the risk of increased interest rates as certain of our borrowings, including borrowings under our Senior Secured Credit Facilities (as defined below), are at variable rates of interest;
•: limiting our flexibility in planning for and reacting to changes in the industry in which we compete and our ability to take advantage of new business opportunities;
•: placing us at a disadvantage compared to other, less leveraged competitors and affecting our ability to compete;
•: increasing our cost of borrowing; and
•: causing our suppliers or other parties with which we maintain business relationships to experience uncertainty about our future and seek alternative relationships with third parties or seek to alter their business relationships with us.

We may also incur substantial indebtedness in the future, subject to the restrictions contained in the indentures governing the Notes (as defined below) and the credit agreements governing our Senior Secured Credit Facilities. If such new indebtedness is in an amount greater than our current indebtedness levels, the related risks that we now face could intensify. However, we cannot assure you that any such additional financing will be available to us on acceptable terms or at all. See "—Our ability to obtain adequate financing or raise capital in the future may be limited."

We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

Our ability to make scheduled payments on or refinance our debt obligations depends on our financial condition and results of operations, which are subject to prevailing economic and competitive conditions and to financial, business, legislative, regulatory and other factors beyond our control. As a result, we cannot assure you that our business will generate a level of cash flows from operating activities sufficient to permit us to make payments on our indebtedness.

If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and may have to undertake alternative financing plans, such as refinancing or restructuring our indebtedness, selling our assets, reducing or delaying capital investments or seeking to raise additional capital. Our ability to restructure or refinance our indebtedness will depend on the conditions of the capital markets and our financial condition at such time. Any refinancing of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. The terms of existing or future debt instruments may also restrict us from adopting some of these alternatives.

If we cannot make scheduled payments on our debt, we will be in default and holders of the Notes and the lenders under our Senior Secured Credit Facilities could declare all outstanding principal and interest to be due and payable, the lenders under our Senior Secured Credit Facilities could terminate their commitments to loan additional money to us and we could be forced into bankruptcy or liquidation.

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The occurrence of any of the foregoing would materially and adversely affect our business, financial position and results of operations.

Our debt agreements contain restrictions that may limit our flexibility in operating our business.

The indentures governing the Notes and the credit agreements governing our Senior Secured Credit Facilities contain, and any agreements governing future indebtedness will likely contain, a number of restrictive covenants that impose significant operating and financial restrictions, including restrictions on our ability to engage in acts that may be in our long-term best interest, including restrictions on our and our subsidiaries' ability to:

•: incur additional indebtedness and guarantee indebtedness;
•: create liens;
•: make investments, loans or advances;
•: merge or consolidate;
•: sell assets, including capital stock of subsidiaries or make acquisitions;
•: pay dividends or make other distributions in respect of, or repurchase or redeem, capital stock;
•: prepay, redeem or repurchase certain indebtedness;
•: enter into transactions with affiliates; and
•: alter our lines of business.

In addition, the springing financial covenant in the credit agreement governing our Asset-Based Revolving Credit Facility requires the maintenance of a minimum fixed charge coverage ratio, which covenant is triggered when excess availability under our Asset-Based Revolving Credit Facility is less than the greater of $50.0 million and 10% of the Line Cap (as defined in the credit agreement governing the Asset-Based Revolving Credit Facility) then in effect. Our ability to meet the financial covenant could be affected by events beyond our control.

A breach of the covenants under the indentures governing the Notes or under the credit agreements governing our Senior Secured Credit Facilities could result in an event of default under the applicable debt document. Such a default, if not cured or waived, may allow the creditors to accelerate the related debt and may result in the acceleration of any other debt that is subject to an applicable cross-acceleration or cross-default provision. In addition, an event of default under the credit agreements governing our Senior Secured Credit Facilities would permit the lenders under our Senior Secured Credit Facilities to terminate all commitments to extend further credit under the facilities. Furthermore, if we were unable to repay the amounts due and payable under our Senior Secured Credit Facilities, those lenders could proceed against the collateral granted to them to secure that indebtedness. If our lenders or holders of the Notes accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness. See "Description of Certain Indebtedness" for more information.

Based on the foregoing factors, the operating and financial restrictions and covenants in our current debt agreements and any future financing agreements could adversely affect our ability to finance future operations or capital needs or to engage in other business activities.

Our ability to obtain adequate financing or raise capital in the future may be limited.

Our business and operations may consume resources faster than we anticipate. To support our operating strategy, we must have sufficient capital to continue to make significant investments in our new and existing stores, online operations and advertising. While some of these investments can be

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financed with borrowings under our Asset-Based Revolving Credit Facility, the amount of such borrowings is limited to a periodic borrowing base valuation of our accounts receivable and domestic inventory and is therefore potentially subject to significant fluctuations, as well as certain discretionary rights of the administrative agent of our Asset-Based Revolving Credit Facility in respect of the calculation of such borrowing base value.

Since availability under our Asset-Based Revolving Credit Facility and/or cash generated by our operations may not be sufficient to allow us to fund our capital requirements in the future, we may need to raise additional funds through credit, the issuance of new equity or debt securities or a combination of both. Additional financing may not be available on favorable terms or at all. If we obtain credit or issue new debt securities, the debt holders would have rights senior to holders of our common stock to make claims on our assets and the terms of any indebtedness could restrict our operations, including our ability to pay dividends on our common stock. If we issue additional equity securities, existing stockholders will experience dilution and the new equity securities could have rights senior to those of our common stock. Because our decision to obtain credit or issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of such transactions. Thus, investors in our common stock bear the risk of our future indebtedness or securities offerings reducing the market price of our common stock and/or diluting their interests.

In addition, the credit and securities markets and the financial services industry have recently experienced disruption characterized by the bankruptcy, failure, collapse or sale of various financial institutions, increased volatility in securities prices, diminished liquidity and credit availability and intervention from the U.S. and other governments. The cost and availability of credit has been and may continue to be adversely affected by these conditions. We cannot be certain that funding for our capital needs will be available from our existing financial institutions and the credit and securities markets if needed, and if available, to the extent required, and on acceptable terms.

The Asset-Based Revolving Credit Facility matures on October 25, 2018, the Senior Secured Term Loan Facility matures on October 25, 2020, the Cash Pay Notes (as defined below) and the PIK Toggle Notes (as defined below) mature on October 15, 2021, and the 2028 Debentures (as defined below) mature on June 1, 2028. If we cannot renew or refinance the foregoing indebtedness upon their respective maturities or, more generally, obtain funding when needed, in each case on acceptable terms, we may be unable to continue to fund our capital requirements, which may have an adverse effect on our business, financial condition and results of operations.

We may elect to pay interest on the PIK Toggle Notes in the form of PIK Interest or partial PIK Interest rather than in the form of Cash Interest.

In the future, we may elect to pay either 50% or all of the interest due on the PIK Toggle Notes for such period in PIK Interest (as defined below) by either increasing the principal amount of the outstanding PIK Toggle Notes or by issuing new PIK Toggle Notes for the entire amount of the interest payment, thereby increasing the aggregate principal amount of the PIK Toggle Notes. We may elect to pay interest in the form of PIK Interest or partial PIK Interest on up to six interest payments in the aggregate on any interest payment date in respect of the third interest payment in April 2015 (which was paid in cash) through the tenth interest payment in October 2018. If we make such future interest payments in the form of PIK Interest or partial PIK Interest, the principal amount of the outstanding PIK Toggle Notes would be increased, which in turn would further increase our substantial indebtedness. See "Risks Related to our Indebtedness—Our substantial indebtedness could adversely affect our business, financial condition and results of operations and our ability to fulfill our obligations with respect to such indebtedness."

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Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

Borrowings under our Senior Secured Credit Facilities are at variable rates of interest and expose us to interest rate risk. We have historically hedged against interest rate fluctuations by using standard hedging instruments, but we are not required to do so and may not do so in the future. Interest rates are currently at historically low levels. If interest rates increase and we are unable to effectively hedge our interest rate risk, our debt service obligations on the variable rate indebtedness will increase even though the amount borrowed may remain the same, and our net earnings and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease. Assuming all revolving loans are fully drawn (and to the extent that LIBOR is in excess of the 1.00% floor rate with respect to our Senior Secured Term Loan Facility (as defined below)), each quarter point change in interest rates would result in a $9.5 million change in annual interest expense on the indebtedness under our Senior Secured Credit Facilities. In the future, we may enter into interest rate swaps that involve the exchange of floating for fixed rate interest payments to reduce interest rate volatility. However, it is possible that we will not maintain interest rate swaps with respect to any of our variable rate indebtedness. Alternatively, any swaps we enter into may not fully or effectively mitigate our interest rate risk.

A lowering or withdrawal of the ratings assigned to our debt securities by rating agencies may increase our future borrowing costs and reduce our access to capital.

Our indebtedness currently has a non-investment grade rating, and any rating assigned could be lowered or withdrawn entirely by a rating agency if, in that rating agency's judgment, future circumstances relating to the basis of the rating, such as adverse changes in our business, warrant. Any downgrade by any ratings agency may increase the interest rate on our Senior Secured Credit Facilities or result in higher borrowing costs. Any future lowering of our ratings likely would make it more difficult or more expensive for us to obtain additional debt financing.

Risks Related to This Offering and Ownership of Our Common Stock

An active trading market for our common stock may never develop or be sustained, which could impede your ability to sell your shares at or above the offering price or at all.

Prior to this offering, there has been no public market for our common stock and there can be no assurance that an active trading market for our common stock will develop or, if developed, that the active trading market will be sustained. The initial public offering price of our common stock has been determined by negotiation between us and the representatives of the underwriters based on a number of factors and may not be indicative of prices that will prevail in the open market following this offering. If the market price of our common stock declines significantly, or if an active trading market for our common stock is not developed or sustained, you may be unable to resell your shares at or above the offering price or at all.

The market price and trading volume of our common stock may be volatile, which could result in a rapid and substantial loss or impairment of your investment.

Even if an active trading market for our common stock develops and is sustained, the market price and trading volume of our common stock may be highly volatile and could be subject to wide price fluctuations in response to various factors, many of which are beyond our control, including those described above in "Risks Related to Our Business and Industry" and the following:

•: actual or anticipated variations in our quarterly or annual results of operations (including our comparable revenues) or those of our competitors; the financial guidance we may provide to the public, any changes in such guidance or our failure to meet such guidance;

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•: the contents of published research reports about us or our industry, the failure of securities analysts to cover our common stock after this offering, changes in financial estimates by securities analysts that follow us or our failure to meet such estimates;
•: additions or departures of key management personnel;
•: any increased indebtedness we may incur in the future;
•: announcements by us or others and developments affecting us;
•: sales or anticipated sales of large blocks of our common stock, including by us, our Sponsors or members of our Board of Directors or management;
•: waiver, termination or expiration of lock-up agreements with our management team and principal shareholders;
•: short selling of our common stock;
•: actions by institutional stockholders;
•: litigation and governmental investigations;
•: new laws or regulations or new interpretation of existing laws or regulations applicable to us and our business;
•: changes in stock market prices and trading volumes of securities of similar companies;
•: speculation or reports by the press or investment community with respect to us, our competitors or our industry in general, including rumors, whether or not correct;
•: increases in market interest rates that may lead purchasers of our shares to demand a higher yield;
•: announcements by us or our competitors of significant contracts, acquisitions, dispositions, strategic relationships, joint ventures or capital commitments;
•: the granting or exercise of employee stock options;
•: default on our indebtedness;
•: the failure of any of our initiatives to achieve commercial success;
•: changes in accounting principles or methodologies;
•: general market, regulatory, political and economic conditions, including any such conditions and local conditions in the markets in which our customers are located; and
•: the realization of any risks described under this "Risk Factors" section.

Furthermore, the stock market in general has from time to time experienced extreme price and volume fluctuations, including in recent years, which have affected and continue to affect the market prices of equity securities of many companies. These fluctuations sometimes have been unrelated or disproportionate to the actual operating performance of those companies. These and other factors may cause the market price and demand for our common stock to fluctuate substantially regardless of our actual operating performance, which may limit or prevent you from readily selling your shares of common stock and may otherwise adversely affect the price or liquidity of our common stock.

In addition, in the past, following periods of volatility in the overall market and the market price of a company's securities, securities class action litigation has often been instituted against the company that issued the security. This litigation, if instituted against us, could result in substantial costs and a

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diversion of our management's attention and resources. As a result, such litigation may adversely affect our business, financial condition and results of operations.

Future offerings of equity or debt securities by us may adversely affect the market price of our common stock.

In the future, we may attempt to obtain financing or to increase further our capital resources by issuing additional shares of our common stock or other equity securities or by offering debt securities, including commercial paper, medium-term notes, senior or subordinated notes, debt securities convertible into equity or shares of preferred stock.

Issuing additional shares of our common stock or other equity securities or securities convertible into equity may dilute the economic and voting rights of our stockholders and/or reduce the market price of our common stock. Preferred shares, if issued, could have a preference with respect to payments that could limit our ability to pay dividends to holders of our common stock. Upon liquidation, holders of debt securities and preferred shares, if issued, and lenders with respect to other borrowings would receive a distribution of our available assets prior to the holders of our common stock. Debt securities convertible into equity could be subject to adjustments in the conversion ratio pursuant to which certain events may increase the number of equity securities issuable upon conversion.

Our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, which may adversely affect the amount, timing or nature of our future offerings. Thus, holders of our common stock bear the risk that our future offerings may reduce the market price of our common stock and dilute their interest in us.

The market price of our common stock could be negatively affected by future sales or the possibility of future sales of substantial amounts of our common stock in the public markets.

The market price of our common stock could be negatively affected as a result of (i) future sales, or the perception that future sales could occur, of a large number of shares of our common stock in the market after this offering, particularly sales by our significant stockholders (including our Sponsors) and members of our Board of Directors and management, and (ii) a large number of shares of our common stock being registered or offered for sale. After this offering, there will be shares of our common stock outstanding (or shares of our common stock if the underwriters' option to purchase additional shares from us is exercised in full). Of these shares, the common stock sold in this offering will be freely transferable, except for any shares held by our "affiliates," as that term is defined in Rule 144 under the Securities Act.

Additionally, after the closing of this offering, shares of our common stock will be issuable upon exercise of stock options that vest and are exercisable at various dates through , with an average weighted exercise price of $ per share. Of such options, are currently exercisable. As soon as practicable after the closing of this offering, we intend to file a registration statement on Form S-8 under the Securities Act to register shares of our common stock issued or reserved for issuance under the Stock Incentive Plans. The Form S-8 registration statement will become effective immediately upon filing, and shares covered by that registration statement will thereupon be eligible for sale in the public markets, subject to vesting restrictions, the lock-up agreements described below and Rule 144 limitations applicable to affiliates.

We and our executive officers, directors and substantially all of our stockholders, including our Sponsors, have entered into lock-up agreements, pursuant to which neither we nor they will sell any shares of our common stock without the prior written consent of for a period of 180 days after the date of this prospectus, subject to certain exceptions and extensions under certain circumstances. See "Underwriting." Following the expiration of the applicable lock-up period, all of these shares of our common stock will be eligible for future sale, subject to the applicable volume, manner of sale, holding period and other limitations of Rule 144, which could cause the market price

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of our common stock to decline significantly. In addition, our Sponsors have certain demand registration rights, and all of our stockholders have piggyback registration rights with respect to their shares of common stock. See "Shares Eligible for Future Sale" for a discussion of the shares of our common stock that may be sold into the public market in the future, including the shares of common stock held by our Sponsors.

A decline in the market price of our common stock and sales of shares of our common stock as restrictions end may make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

Our Sponsors will continue to have substantial control over us after this offering, will be able to influence corporate matters and may take actions that conflict with your interests and have the effect of delaying or preventing changes of control or changes in management, or limiting the ability of other stockholders to approve transactions they deem to be in their best interests.

Upon the closing of this offering, our directors, executive officers and holders of more than 5% of our common stock, together with their affiliates, will beneficially own, in the aggregate, approximately % of our outstanding common stock (or approximately % if the underwriters' option to purchase additional shares from us is exercised in full). Ares and CPPIB will beneficially own approximately % and %, respectively, of our aggregate common stock (or approximately % and %, respectively, if the underwriters' option to purchase additional shares from us is exercised in full). As a result, our Sponsors will be able to exercise significant influence over all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions, such as a merger or other sale of us or all or substantially all of our assets. The interests of our Sponsors could conflict in material respects with yours, and this concentration of ownership could limit your ability to influence corporate matters and may have the effect of delaying or preventing a third party from acquiring control over us.

You will suffer immediate and substantial dilution in your investment because our earlier investors paid substantially less than the initial public offering price when they purchased their shares.

If you purchase shares in this offering, you will incur immediate and substantial dilution of $ in net tangible book value (deficit) per share (and $ if the underwriters' option to purchase additional shares from us is exercised in full), based on an assumed initial public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus, because the price that you pay will be substantially greater than the net tangible book value (deficit) per share of the shares acquired. This dilution arises because our earlier investors paid substantially less than the initial public offering price when they purchased their shares of our common stock. Furthermore, there will be options to purchase shares of common stock outstanding upon the closing of this offering that have exercise prices below the initial public offering price. To the extent such options are exercised in the future, there may be further dilution to new investors. See "Dilution."

In the future, we expect to issue options, restricted stock and/or other forms of share-based compensation, which have the potential to dilute stockholders' value and cause the price of our common stock to decline.

We expect to offer stock options, restricted stock and/or other forms of share-based compensation to our directors and employees in the future. The availability of shares of common stock for award under the Stock Incentive Plans or the grant of stock options, restricted stock or other forms of share-based compensation may adversely affect the market price of our common stock. In addition, if any options that we issue are exercised or any restrictions on restricted stock that we issue lapse, and those shares are sold into the public market, the market price of our common stock may decline.

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Since we have no current plans to pay regular cash dividends on our common stock following this offering, you may not receive any return on your investment unless you sell your common stock for a price greater than that which you paid for it.

We do not expect to pay dividends on our common stock for the foreseeable future. Any future determination to pay dividends on our common stock will be at the discretion of our Board of Directors and will depend upon many factors, including our financial position, results of operations, liquidity, legal requirements, contractual restrictions, including under the agreements governing our Senior Secured Credit Facilities and the indentures governing the Notes, and other factors deemed relevant by our Board of Directors. Therefore, any return on your investment in our common stock is solely dependent upon the appreciation of the price of our common stock on the open market, which may not occur. Investors seeking cash dividends should not purchase our common stock. See "Dividend Policy" for more detail.

Although we do not expect to rely on the "controlled company" exemption, since we will qualify as a "controlled company" within the meaning of the applicable stock exchange upon completion of this offering, we will qualify for exemptions from certain corporate governance requirements.

Under the rules of the , a company of which more than 50% of the voting power is held by another person or group of persons acting together is a "controlled company" and may elect not to comply with certain rules of such stock exchange regarding corporate governance, including:

•: the requirement that our Board of Directors be composed of a majority of independent directors;
•: the requirement that we have a nominating and corporate governance committee of our Board of Directors composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities;
•: the requirement that we have a compensation committee of our Board of Directors composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities; and
•: the requirement that our Board of Directors conducts an annual performance evaluation of the nominating and corporate governance committee of our Board of Directors and the compensation committee of our Board of Directors.

These requirements will not apply to us as long as we remain a "controlled company." Although we will qualify as a "controlled company" upon completion of this offering, we do not expect to rely on this exemption, and we intend to fully comply with all corporate governance requirements under the rules of the applicable stock exchange. However, if we were to utilize some or all of these exemptions, you may not have the same protections afforded to stockholders of companies that are subject to all of the rules of the regarding corporate governance.

If securities or industry analysts do not publish or cease publishing research or reports about us or our industry, if they adversely change their recommendations regarding our common stock or if our results of operations do not meet their expectations, our stock price and trading volume could decline.

The trading market for our common stock will be influenced by the research and reports that industry or securities analysts may publish about us, our industry or our competitors. We do not have any control over these analysts. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our share price or trading volume to decline. Moreover, if one or more of the analysts who cover us downgrade our common stock, publish inaccurate or unfavorable research about our business or

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provide relatively more favorable recommendations about our competitors, our stock price could decline.

Negative publicity may affect our business performance and could affect our stock price.

Unfavorable media related to our industry, company, brands, designers, marketing, personnel, operations, business performance, or prospects may affect our stock price and the performance of our business, regardless of its accuracy or inaccuracy. Our success in maintaining, extending, and expanding our brand image depends on our ability to adapt to a rapidly changing media environment. Adverse publicity or negative commentary on social media outlets, such as blogs, websites, or newsletters, could hurt our results of operations, as consumers might avoid brands that receive bad press or negative reviews. Negative publicity may result in a decrease in results of operations that could lead to a decline in the price of our common stock and cause you to lose all or a portion of your investment.

Conflicts of interest may arise because some of our directors are representatives of our Sponsors.

Entities affiliated with Ares and affiliates of CPPIB may hold equity interests in entities that directly or indirectly compete with us, and companies in which they currently invest may begin competing with us. In addition, Norman H. Axelrod provides consulting services to affiliates of Ares Management (as defined below), David B. Kaplan and Adam L. Stein are partners or employees of Ares Management or its affiliates, and Shane D. Feeney and Scott T. Nishi are employees of CPPIB or its affiliates. As a result of these relationships, when conflicts arise between the interests of our Sponsors and their affiliates, on the one hand, and the interests of the Company and our other stockholders, on the other hand, these directors may not be disinterested. Although our directors and officers have a duty of loyalty to the Company, under Delaware law, transactions that we enter into in which a director or officer has a financial interest are not void or voidable solely as a result of such interest so long as (i) the material facts relating to the director's or officer's relationship or interest and as to the transaction are disclosed or are known to our Board of Directors and a majority of our disinterested directors, or a committee consisting solely of disinterested directors approves the transaction, (ii) the material facts relating to the director's or officer's relationship or interest and as to the transaction are disclosed or are known to our stockholders and a majority of our disinterested stockholders specifically approves the transaction or (iii) the transaction is otherwise fair to us. Under our amended and restated certificate of incorporation that will be in effect upon the closing of this offering (our certificate of incorporation), representatives of Ares and CPPIB are not required to offer to us any business opportunity of which they become aware and could take any such opportunity for themselves or offer it to other companies in which they have an investment, unless such opportunity is offered to them in writing solely in their capacity as an officer or director of us.

Our management will have broad discretion over the use of the proceeds we receive in this offering and might not apply the proceeds in ways that increase the value of your investment.

Our management will have broad discretion to use the net proceeds from this offering and you will be relying on the judgment of our management regarding the application of such proceeds. Our management might not apply the net proceeds from this offering in ways that increase the value of your investment. We expect to use the net proceeds from this offering to repay indebtedness and for general corporate purposes. Our management might not be able to generate a significant return, if any, on any investment of these net proceeds. You will not have the opportunity to influence management's decisions regarding how to use the net proceeds from this offering.

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Anti-takeover provisions could impair a takeover attempt and adversely affect existing stockholders and the trading price of our common stock.

Certain provisions of our certificate of incorporation and our amended and restated bylaws that will be in effect upon the closing of this offering (our bylaws) and applicable provisions of Delaware law may have the effect of rendering more difficult, delaying or preventing an acquisition of the Company, even when such an acquisition would be in the best interest of our stockholders. These provisions include:

•: a classified Board of Directors;
•: the inability of stockholders to remove directors without cause from and after the time that our Sponsors and their affiliates cease to beneficially own shares of our common stock representing at least a majority of our outstanding common stock (the Trigger Date);
•: the sole power of our Board of Directors to fix the number of directors;
•: the requirement that certain advance notice procedures be followed for our stockholders to submit nominations of candidates for election to our Board of Directors and to bring other proposals before a meeting of the stockholders;
•: the power of our Board of Directors to amend our bylaws without stockholder approval;
•: the sole power of our Board of Directors to fill any newly created directorship or vacancy on our Board of Directors, whether such vacancy occurs as a result of the resignation, removal or death of a director or otherwise;
•: the ability of our Board of Directors to designate one or more series of preferred stock and issue shares of preferred stock without stockholder approval;
•: the requirement that, to the fullest extent permitted by law and unless we consent to an alternate forum, certain intracorporate proceedings against or involving us or our directors, officers, employees or stockholders be brought exclusively in the Court of Chancery in the State of Delaware;
•: the lack of cumulative voting rights at elections of directors;
•: the inability of stockholders to act by written consent from and after the Trigger Date; and
•: the inability of stockholders to call special meetings.

Our issuance of shares of preferred stock could delay, defer or prevent a change of control of the Company without further action by our stockholders, even where stockholders are offered a premium for their shares. As of the closing of this offering, our Board of Directors will have the authority to cause us to issue, without any further vote or action by our stockholders, up to shares of preferred stock, par value $0.001 per share, in one or more series, to designate the number of shares constituting any series and to fix the rights, powers, preferences, privileges of such series and qualifications, limitations and restrictions thereof, including dividend rights, voting rights, conversion rights, rights and terms of redemption, redemption price or prices and liquidation preferences of such series.

In addition, the issuance of shares of preferred stock with voting rights may adversely affect the voting power of the holders of our other classes of voting stock either by diluting the voting power of our other classes of voting stock if they vote together as a single class, or by giving the holders of any such preferred stock the right to block an action on which they have a separate class vote even if the action were approved by the holders of our other classes of voting stock. Also, the issuance of shares of preferred stock with dividend or conversion rights, liquidation preferences or other economic terms favorable to the holders of preferred stock could adversely affect the market price for our common

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stock by making an investment in our common stock less attractive. For example, a conversion feature could cause the trading price of our common stock to decline to the conversion price of the preferred stock. We currently do not anticipate issuing any shares of preferred stock in the foreseeable future.

These provisions could delay or prevent hostile takeovers and changes in control or changes in our management. Any provision of our certificate of incorporation or bylaws or Delaware law that has the effect of delaying or deterring a change in control or otherwise makes an investment in our common stock less attractive could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock. See "Description of Capital Stock."

The provision of our certificate of incorporation requiring exclusive venue in the Court of Chancery in the State of Delaware for certain types of lawsuits may have the effect of discouraging lawsuits against our directors and officers.

Our certificate of incorporation, as it will be in effect upon the closing of this offering, will require, to the fullest extent permitted by law, unless otherwise consented to by us, that (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, other employees or stockholders to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware (the DGCL) or our certificate of incorporation or our bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery or (iv) any action asserting a claim governed by the internal affairs doctrine will have to be brought only in the Court of Chancery in the State of Delaware. Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies and by avoiding the time and expense of multi-forum litigation, the provision may have the effect of discouraging lawsuits against our directors and officers.

Our holding company structure makes us dependent on our subsidiaries for our cash flow and subordinates your rights as a stockholder to the rights of creditors of our subsidiaries in the event of an insolvency or liquidation of any of our subsidiaries.

We are a holding company and, accordingly, substantially all of our operations are conducted through our subsidiaries. Our subsidiaries are separate and distinct legal entities. As a result, our cash flow depends upon the earnings of our subsidiaries. In addition, we depend on the distribution of earnings, loans or other payments by our subsidiaries to us, which are restricted by the covenants in the agreements governing our Senior Secured Credit Facilities and the indentures governing the Notes. Our subsidiaries have no obligation to provide us with funds for our payment obligations. If there is an insolvency, liquidation or other reorganization of any of our subsidiaries, you as a stockholder will have no right to proceed against their assets. Creditors of those subsidiaries will be entitled to payment in full from the sale or other disposal of the assets of those subsidiaries before we, as a stockholder, would be entitled to receive any distribution from that sale or disposal.

As a public company, we will incur additional costs, be subject to additional regulations and face increased demands on our management, which could lower our profits or make it more difficult to run our business.

As a public company with shares listed on a U.S. exchange, we will need to comply with an extensive body of regulations and will incur significant legal, accounting and other expenses that we have not incurred as a private company with a subsidiary that is a voluntary filer. Our internal infrastructure may not have adequate resources to support the increased reporting obligations associated with being a public company and we may be unable to hire, train or retain necessary staff and may initially be reliant on engaging outside consultants or professionals to overcome our lack of experience in these areas. Our business could be adversely affected if our internal infrastructure is

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inadequate, if we are unable to engage outside consultants or are otherwise unable to fulfill our new public company obligations.

If we are unable to maintain effective internal control over financial reporting in the future, we may fail to prevent or detect material misstatements in our financial statements, in which case investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may decline.

As a public company, we will be required to maintain internal control over financial reporting and to report any material weaknesses in such internal control. In addition, we will be required to file a report by management on the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act. If we identify any material weaknesses in our internal control over financial reporting, if we are unable to comply with the requirements of Section 404 or assert that our internal control over financial reporting is effective or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting when required, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be adversely affected. In addition, we could become subject to sanctions or investigations by the applicable stock exchange, the SEC or other regulatory authorities, which could require additional financial and management resources.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus, including the sections entitled "Prospectus Summary," "Risk Factors," "Use of Proceeds," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business," contains forward-looking statements. In many cases, forward-looking statements can generally be identified by the use of forward-looking terminology such as "may," "plan," "predict," "expect," "estimate," "intend," "would," "will," "could," "should," "anticipate," "believe," "project" or "continue" or the negative thereof or other similar expressions.

The forward-looking statements contained in this prospectus reflect our views as of the date of this prospectus and are based on our expectations and beliefs concerning future events, as well as currently available data as of the date of this prospectus. While we believe there is a reasonable basis for our forward-looking statements, they involve a number of risks, uncertainties, assumptions and changes in circumstances that may cause our actual results, performance or achievements to differ significantly from those expressed or implied in any forward-looking statement. Therefore, these statements are not guarantees of future events, results, performance or achievements and you should not rely on them. A variety of factors could cause our actual results to differ materially from the anticipated or expected results expressed in our forward-looking statements, including those factors described in "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." Factors that could cause our actual results to differ from our expectations include, but are not limited to:

•: economic conditions may negatively impact consumer spending and demand for our merchandise;
•: if we fail to anticipate, identify and respond effectively to changing consumer demands, fashion trends and consumer shopping preferences, our business, financial condition and results of operations may be adversely affected;
•: the luxury retail industry is highly competitive;
•: our failure to successfully execute our omni-channel plans could adversely affect our business, financial condition and results of operations;
•: we depend on the success of our advertising and marketing programs;
•: we depend significantly on the success of the expansion and growth of our retail stores, which are subject to numerous risks, some of which are beyond our control;
•: if we are unable to successfully maintain a relevant and reliable omni-channel experience for our customers, our financial performance and brand image could be adversely affected;
•: our business and performance may be adversely affected by costs associated with our expansion and growth strategies;
•: a significant portion of our revenue is from our stores in four states, which exposes us to downturns or catastrophic occurrences in those states;
•: we are dependent on our relationships with certain designers, vendors and other sources of merchandise;
•: a breach in information privacy could negatively impact our operations;
•: our continued success is substantially dependent on positive perceptions of our company, which, if eroded, could adversely affect our customer and employee relationships;
•: the loss of, or disruption in, one or more of our distribution facilities could adversely affect our business and operations;

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•: our failure to comply with, or developments in, laws, rules or regulations could affect our business or results of operations;
•: our substantial indebtedness could adversely affect our business, financial condition and results of operations and our ability to fulfill our obligations with respect to such indebtedness;
•: our debt agreements contain restrictions that may limit our flexibility in operating our business; and
•: other risks, uncertainties and factors set forth in this prospectus, including those set forth under "Risk Factors."

The foregoing factors are not exhaustive, and new factors may emerge or changes to the foregoing factors may occur that could impact our business. Each of the forward-looking statements contained in this prospectus speaks only as of the date of this prospectus. Except to the extent required by law, we undertake no obligation to update or revise (publicly or otherwise) any forward-looking statements to reflect subsequent events, new information or future circumstances.

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EQUITY CONVERSION

Prior to the consummation of the equity conversion described below, the authorized capital stock of Neiman Marcus Group, Inc. consisted of the following:

•: 3,200,000 authorized shares of Class A common stock, par value $0.001 per share (Existing Class A common stock), with full economic rights and one vote per share on all matters to be voted on by our stockholders other than the election or removal of directors; and
•: 3,200,000 authorized shares of Class B common stock, par value $0.001 per share (Existing Class B common stock), with no economic rights other than the par value and one vote per share on the election and removal of directors (but no other matters).

Except for shares issued to CPPIB and ACOF Mariposa Holdings LLC, each share of Existing Class A common stock was issued in combination with a share of Existing Class B common stock as a "Common Unit." Each Common Unit represented the full set of rights attributable to a typical share of common stock.

Prior to the consummation of this offering, we will complete a recapitalization of our capital stock (the Equity Conversion), whereby:

•: each share of Existing Class A common stock will be automatically converted into shares of Class B common stock;
•: each share of Existing Class B common stock will be automatically converted into one share of Class C common stock, par value $0.001 per share (Class C common stock), with no economic rights other than a liquidation preference equal to the par value and one vote per share on the election and removal of directors (but no other matters), and which shall be redeemable by us at any time and from time to time for the par value thereof;
•: we will redeem all of the outstanding shares of Class C common stock for an amount in cash equal to the aggregate par value thereof, or approximately $ ; and
•: (i) CPPIB will exercise its right to convert the number of shares of Class B common stock into Class A common stock that will result in CPPIB owning approximately 29% of the outstanding shares of Class A common stock following the conversion, and (ii) each other holder of shares of Class B common stock will exercise such holder's right to convert all of such holder's shares of Class B common stock into an equal number of shares of Class A common stock.

After giving effect to the Equity Conversion, the authorized capital stock of Neiman Marcus Group, Inc. will consist of the following:

•: shares of Class A common stock, par value $0.001 per share (Class A common stock), with full economic rights and one vote per share on all matters to be voted on by our stockholders, including the election and removal of directors; and
•: shares of Class B common stock, par value $0.001 per share (Class B common stock), with each share of Class B common stock being (i) identical to a share of Class A common stock except that it does not have the right to vote on the election or removal of directors and (ii) convertible into one share of Class A common stock at any time and from time to time upon the election of the holder.

Additionally, each share of Class A common stock is convertible into one share of Class B common stock at any time and from time to time at the option of the holder so long as such holder holds one or more shares of Class B common stock at the time of conversion.

Due to regulations applicable to Canadian pension funds, CPPIB is prohibited from holding, directly or indirectly, greater than 30% of equity interests that have the right to elect or remove

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directors. We expect that, after giving effect to the Equity Conversion, CPPIB will be the only holder of shares of our Class B common stock.

The Equity Conversion will not affect our operations, which we will continue to conduct through our operating subsidiaries.

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USE OF PROCEEDS

We estimate that our net proceeds from the sale of our common stock in this offering will be approximately $ million, assuming an initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting the estimated underwriting discount and estimated offering expenses payable by us.

A $1.00 increase (decrease) in the assumed initial public offering price of $ per share would increase (decrease) the net proceeds from this offering by $ million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remained the same and after deducting the estimated underwriting discount and estimated offering expenses payable by us. Similarly, a one million share increase (decrease) in the number of shares offered by us, as set forth on the cover of this prospectus, would increase (decrease) the net proceeds from this offering by $ million, assuming the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, remained the same and after deducting the estimated underwriting discount and estimated offering expenses payable by us.

We intend to use approximately $ million of the net proceeds from this offering to repay indebtedness, and to use any remaining net proceeds from this offering for general corporate purposes. We will have broad discretion in the way we use the net proceeds.

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DIVIDEND POLICY

We do not currently intend to pay dividends on our common stock. Instead, we currently intend to use all of our earnings for the operation and growth of our business and the repayment of indebtedness.

Any future determination to pay dividends on our common stock will be at the discretion of our Board of Directors and will depend upon many factors, including our financial position, results of operations, liquidity, legal requirements, contractual restrictions, including under the agreements governing our Senior Secured Credit Facilities and the indentures governing the Notes, and other factors deemed relevant by our Board of Directors. For a further description of the restrictions imposed by the agreements governing our Senior Secured Credit Facilities and the indentures governing the Notes, see "Description of Certain Indebtedness."

We did not declare or pay any dividends on our common stock in fiscal year 2013 or fiscal year 2014, or during the thirty-nine weeks ended May 2, 2015.

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CAPITALIZATION

The following table sets forth our cash and cash equivalents and our capitalization as of May 2, 2015 on:

•

an actual basis; and

•

a pro forma basis, giving effect to:

•: the issuance and sale of shares of our common stock in this offering at an assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated expenses payable by us;
•: the application of the estimated net proceeds from this offering as described under "Use of Proceeds"; and
•: the Equity Conversion.

You should read this table in conjunction with "Use of Proceeds," "Selected Consolidated Financial Information and Other Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Description of Capital Stock" and our Condensed Consolidated Financial Statements and the related notes and other financial information included elsewhere in this prospectus.

	As of May 2, 2015

	Actual			Pro Forma(1)
	(in millions, except share data)
Cash and cash equivalents	$	82.2		$



Total debt:
Asset-Based Revolving Credit Facility	$	150.0
Senior Secured Term Loan Facility (including $29.4 million of current maturities)		2,905.8
Cash Pay Notes		960.0
PIK Toggle Notes		600.0
2028 Debentures		122.2

Total debt		4,738.0

Stockholders' equity:
Undesignated preferred stock, par value $0.001 per share; 500,000 shares authorized, no shares issued and outstanding, actual and pro forma		—
Class A common stock, par value $0.001 per share; 3,200,000 shares authorized, actual; shares authorized, pro forma; 1,557,350 shares issued and outstanding, actual; shares issued and outstanding, pro forma		—
Class B common stock, par value $0.001 per share; 3,200,000 shares authorized, actual; shares authorized, pro forma; 1,557,350 shares issued and outstanding, actual; shares issued and outstanding, pro forma		—
Additional paid-in capital		1,584.1
Accumulated other comprehensive loss		(43.1	)
Accumulated deficit		(86.3	)

Total stockholders' equity		1,454.7

Total capitalization	$	6,192.7		$

(1): A $1.00 increase (decrease) in the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would result in approximately a $ million increase (decrease) in the pro forma amounts of each of (i) total debt, (ii) additional paid-in capital, (iii) total stockholders' equity and (iv) total capitalization, assuming the

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number of shares offered by us, as set forth on the cover page of this prospectus, remained the same and after deducting the estimated underwriting discount and estimated offering expenses payable by us.

: Similarly, a one million share increase (decrease) in the number of shares offered by us, as set forth on the cover of this prospectus, would result in approximately a $ million increase (decrease) in the pro forma amounts of each of (i) total debt, (ii) additional paid-in capital, (iii) total stockholders' equity and (iv) total capitalization, assuming the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover of this prospectus, remained the same and before deducting the estimated underwriting discount and estimated offering expenses payable by us.

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DILUTION

If you invest in our common stock, your ownership interest will be diluted to the extent of the difference between the initial public offering price per share in this offering and the pro forma net tangible book value per share of our common stock immediately following consummation of this offering. Net tangible book value per share represents the book value of our total tangible assets less the book value of our total liabilities divided by the number of shares of our common stock then issued and outstanding. Pro forma net tangible book value (deficit) per share gives effect to (i) the sale by us of shares of common stock in this offering at an assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting the estimated underwriting discount and estimated offering expenses payable by us, and (ii) the application of the estimated net proceeds from this offering as described under "Use of Proceeds."

Our net tangible book value (deficit) as of May 2, 2015 was $ million, or $ per share. Our pro forma net tangible book value (deficit) as of May 2, 2015 was $ million, or $ per share. This represents an immediate increase in pro forma net tangible book value (deficit) per share of $ to our existing stockholders and an immediate dilution of $ per share to new investors purchasing our common stock in this offering.

The following table illustrates this dilution on a per share basis to new investors:


Assumed initial public offering price per share		$
Net tangible book value (deficit) per share as of May 2, 2015
Increase (decrease) in pro forma net tangible book value (deficit) per share attributable to new investors purchasing our common stock in this offering
Pro forma net tangible book value (deficit) per share

Dilution per share to new investors purchasing our common stock in this offering		$

A $1.00 increase (decrease) in the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the pro forma net tangible book value (deficit) after this offering by $ and $ per share and decrease (increase) the dilution to new investors by $ and $ per share, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remained the same and after deducting the estimated underwriting discount and estimated offering expenses payable by us.

Similarly, a one million share increase (decrease) in the number of shares offered by us, as set forth on the cover of this prospectus, would increase (decrease) the pro forma net tangible book value (deficit) after this offering by $ and $ per share and decrease (increase) the dilution in pro forma to investors participating in this offering by $ and $ per share, assuming the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover of this prospectus, remained the same and after deducting the estimated underwriting discount and estimated offering expenses payable by us.

If the underwriters were to fully exercise their option to purchase additional shares of our common stock, the pro forma net tangible book value (deficit) per share as of May 2, 2015 would be $ per share, and the dilution in pro forma net tangible book value (deficit) per share to new investors purchasing our common stock in this offering would be $ per share.

The following table summarizes, as of May 2, 2015, on a pro forma basis as described above, the differences between the number of shares of common stock, the total consideration and the average price per share (i) paid to us by existing stockholders and (ii) to be paid by the new investors purchasing our common stock in this offering at an assumed initial public offering price of $ per

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share, which is the midpoint of the price range set forth on the front cover page of this prospectus, before deducting the estimated underwriting discount and estimated offering expenses payable by us.

	Shares Purchased			Total Consideration

	Shares Purchased			Total Consideration			Average Price per Share
	Number	Percent		Amount	Percent		Average Price per Share
	(in thousands)			(in thousands)
Existing stockholders			%	$		%	$
New investors

Total			%	$		%	$

A $1.00 increase (decrease) in the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) total consideration paid by new investors by $ million and increase (decrease) the percentage of total consideration paid by new investors by %, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remained the same and before deducting the estimated underwriting discount and estimated offering expenses payable by us.

Similarly, a one million share increase (decrease) in the number of shares offered by us, as set forth on the cover of this prospectus, would increase (decrease) total consideration paid by new investors by $ million and increase (decrease) the percent of total consideration paid by new investors by %, assuming the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover of this prospectus, remained the same and before deducting the estimated underwriting discount and estimated offering expenses payable by us.

If the underwriters were to fully exercise their option to purchase additional shares of our common stock, the percentage of shares of our common stock held by existing stockholders will be reduced to % of the total number of shares of our common stock outstanding after this offering, and the number of shares held by new investors will increase to shares, or % of the total number of shares of our common stock outstanding after this offering.

The discussion and tables above are based on shares of our common stock outstanding as of May 2, 2015, assuming the consummation of the Equity Conversion prior to the closing of this offering, and exclude:

•: shares of our common stock issuable upon the exercise of stock options outstanding as of May 2, 2015 at a weighted average exercise price of $ per share; and
•: shares of common stock reserved for future issuance under the 2015 Stock Incentive Plan.

If all of these outstanding options were exercised, then our existing stockholders, including the holders of these outstanding options, would own % and our new investors would own % of the total number of shares of our common stock outstanding upon the closing of this offering. In such event, the total consideration paid by our existing stockholders, including the holders of these outstanding options, would be approximately $ million, or %, the total consideration paid by our new investors would be $ million, or %, the average price per share paid by our existing stockholders would be $ , and the average price per share paid by our new investors would be $ .

In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of such securities could result in further dilution to our stockholders.

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SELECTED CONSOLIDATED FINANCIAL INFORMATION AND OTHER DATA

The following tables present selected consolidated financial information of Neiman Marcus Group, Inc. You should read these tables in conjunction with "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Business" and our Consolidated Financial Statements and Condensed Consolidated Financial Statements and the related notes included elsewhere in this prospectus. Our historical results are not necessarily indicative of results for any future period and results of operations for interim periods are not necessarily indicative of the results that might be expected for any other interim period or for an entire year.

The results of operations data set forth below for the fiscal years ended July 28, 2012, August 3, 2013 and August 2, 2014 and the balance sheet data set forth below as of August 3, 2013 and August 2, 2014 have been derived from our Consolidated Financial Statements included elsewhere in this prospectus. The results of operations data set forth below for the thirteen weeks ended November 2, 2013 and each of the thirty-nine weeks ended August 2, 2014 and May 2, 2015 and the balance sheet data set forth below as of August 2, 2014 and May 2, 2015 have been derived from our Condensed Consolidated Financial Statements included elsewhere in this prospectus. The results of operations data set forth below for each of the fiscal years ended July 31, 2010 and July 30, 2011 and the balance sheet data set forth below as of July 31, 2010, July 30, 2011 and July 28, 2012 have been derived from our Consolidated Financial Statements not included in this prospectus.

													Fiscal year ended

				Fiscal year ended August 2, 2014(1)			Thirty-nine weeks ended August 2, 2014			Thirteen weeks ended November 2, 2013			Fiscal year ended
	Thirty-nine weeks ended May 2, 2015			Fiscal year ended August 2, 2014(1)			Thirty-nine weeks ended August 2, 2014			Thirteen weeks ended November 2, 2013			August 3, 2013(2)			July 28, 2012			July 30, 2011			July 31, 2010
(in millions, except share and per share data)	(Successor)			(Combined)			(Successor)			(Predecessor)			(Predecessor)			(Predecessor)			(Predecessor)			(Predecessor)
OPERATING RESULTS DATA
Revenues	$	3,928.4		$	4,839.3		$	3,710.2		$	1,129.1		$	4,648.2		$	4,345.4		$	4,002.3		$	3,692.8
Cost of goods sold including buying and occupancy costs (excluding depreciation)		2,502.6			3,248.4			2,563.0			685.4			2,995.4			2,794.7			2,589.3			2,417.6
Selling, general and administrative expenses (excluding depreciation)		894.7			1,101.4			835.0			266.4			1,047.8			1,006.9			924.3			878.1
Income from credit card program		(40.8	)		(55.3	)		(40.7	)		(14.7	)		(53.4	)		(51.6	)		(46.0	)		(59.1	)
Depreciation and amortization(3)		244.0			307.9			262.0			46.0			188.9			180.2			194.9			215.1
Operating earnings		299.8			41.0			8.8			32.1			446.4			403.6			329.7			231.8
Net earnings (loss)		47.8			(147.2	)		(134.1	)		(13.1	)		163.7			140.1			31.6			(1.8	)
Earnings (loss) per share—basic(4)
Earnings (loss) per share—diluted(4)
Weighted average shares—basic(4)
Weighted average shares—diluted(4)
BALANCE SHEET DATA (at period end)
Total assets		8,871.4						8,761.7						5,300.2			5,201.9			5,364.8			5,532.3
Total liabilities		7,416.7						7,329.1						4,469.2			4,586.3			4,370.5			4,606.9
Long-term debt, excluding current maturities		4,708.6						4,580.5						2,697.1			2,781.9			2,681.7			2,879.7
Cash dividends per share		—						—						—			435.0			—		$	—

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													Fiscal year ended

				Fiscal year ended August 2, 2014(1)			Thirty-nine weeks ended August 2, 2014			Thirteen weeks ended November 2, 2013			Fiscal year ended
	Thirty-nine weeks ended May 2, 2015			Fiscal year ended August 2, 2014(1)			Thirty-nine weeks ended August 2, 2014			Thirteen weeks ended November 2, 2013			August 3, 2013(2)			July 28, 2012			July 30, 2011			July 31, 2010
(dollars in millions, except sales per square foot)	(Successor)			(Combined)			(Successor)			(Predecessor)			(Predecessor)			(Predecessor)			(Predecessor)			(Predecessor)
OTHER DATA
Change in comparable revenues(5)		4.5	%		5.5	%		5.4	%		5.7	%		4.9	%		7.9	%		8.1	%		(0.1	)%
Number of full-line stores open at period end		43			43			43			43			43			44			43			43
Sales per square foot(6)	$	457		$	578		$	440		$	138		$	552		$	535		$	505		$	466
Percentage of revenues transacted online		25.8	%		23.9	%		24.6	%		21.4	%		22.2	%		20.2	%		18.9	%		18.5	%
Adjusted EBITDA(7)	$	$602.7		$	698.4		$	501.3		$	197.2		$	682.7		$	619.5		$	544.6		$	473.5
Adjusted EBITDA as a percentage of revenues		15.3	%		14.4	%		13.5	%		17.5	%		14.7	%		14.3	%		13.6	%		12.8	%
Adjusted Net Earnings(7)	$	161.4		$	169.2		$	101.9		$	67.3		$	224.7		$	195.4		$	85.6		$	63.2
Net capital expenditures(8)		152.5			168.3			132.3			36.0			139.3			142.2			83.7			44.3
Depreciation expense		136.6			147.6			113.3			34.2			141.5			130.1			132.4			141.8
Rent expense and related occupancy costs		85.9			103.7			79.6			24.1			96.7			91.9			87.6			85.0

(1): The presentation of the combined fiscal year ended August 2, 2014 does not comply with GAAP. For more information see "Basis of Presentation" on page ii of this prospectus. The note also applies to the corresponding information set forth in the tables in note 7 below.
(2): Fiscal year 2013 consists of the fifty-three weeks ended August 3, 2013. All other fiscal years consist of fifty-two weeks. The note also applies to the corresponding information set forth in the tables in note 7 below.
(3): Amounts include incremental depreciation expense arising from fair value adjustments recorded in connection with purchase accounting.
(4): Basic earnings per common share amounts are calculated using the weighted average number of shares of our common stock outstanding for the period, after giving effect to the Equity Conversion. Diluted earnings per common share amounts are calculated using the weighted average number of shares of our common stock outstanding for the period and include the dilutive impact of stock options using the treasury stock method, after giving effect to the Equity Conversion.
(5): For more information regarding our calculation of comparable store sales growth, see "Comparable Revenues" on page iii of this prospectus.
(6): Sales per square foot are calculated as net sales of our Neiman Marcus and Bergdorf Goodman full-line stores for the applicable period divided by weighted average square footage. Weighted average square footage includes a percentage of period-end square footage for new and closed stores equal to the percentage of the period during which they were open.
(7): For an explanation of Adjusted EBITDA and Adjusted Net Earnings, see "Non-GAAP Financial Measures" on page iv of this prospectus.

Adjusted EBITDA is calculated as follows:

												Fiscal year ended

			Fiscal year ended August 2, 2014			Thirty-nine weeks ended August 2, 2014			Thirteen weeks ended November 2, 2013			Fiscal year ended
	Thirty-nine weeks ended May 2, 2015		Fiscal year ended August 2, 2014			Thirty-nine weeks ended August 2, 2014			Thirteen weeks ended November 2, 2013			August 3, 2013		July 28, 2012		July 30, 2011		July 31, 2010
(dollars in millions)	(Successor)		(Combined)			(Successor)			(Predecessor)			(Predecessor)		(Predecessor)		(Predecessor)		(Predecessor)
Net earnings (loss)	$	47.8	$	(147.2	)	$	(134.1	)	$	(13.1	)	$	163.7	$	140.1	$	31.6	$	(1.8	)
Income tax expense (benefit)		34.1		(81.9	)		(89.8	)		7.9			113.7		88.3		17.6		(3.5	)
Interest expense, net		217.9		270.1			232.7			37.3			169.0		175.2		280.5		237.1
Depreciation expense		136.6		147.6			113.3			34.2			141.5		130.1		132.4		141.8
Amortization of intangible assets and favorable lease commitments		107.4		160.3			148.6			11.7			47.4		50.1		62.5		73.3

EBITDA	$	543.9	$	348.9		$	270.8		$	78.1		$	635.3	$	583.8	$	524.7	$	446.9
Amortization of inventory step-up(a)		6.8		129.6			129.6			—			—		—		—		—
Incremental rent expense(b)		8.2		9.3			8.5			0.8			4.0		4.5		4.3		4.3
Transaction and other costs(c)		15.1		164.8			55.4			109.4			—		—		—		—
Non-cash stock-based compensation		6.4		8.8			6.2			2.5			9.7		6.9		3.9		10.1
Equity in loss of foreign e-commerce retailer(d)		—		5.1			3.6			1.5			13.1		1.5		—		—
Expenses related to cyber-attack(e)		4.1		12.6			12.6			—			—		—		—		—
Management fee due to Former Sponsors(f)		—		2.8			—			2.8			10.0		10.0		10.0		9.2
Expenses incurred in connection with openings of new stores/remodels of existing stores(g)		9.3		5.8			4.0			1.8			5.1		6.6		1.7		3.1
Other non-recurring expenses(h)		8.8		10.7			10.5			0.2			5.4		6.2		—		—

Adjusted EBITDA(i)	$	602.7	$	698.4		$	501.3		$	197.2		$	682.7	$	619.5	$	544.6	$	473.5

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: Adjusted Net Earnings are calculated as follows:

												Fiscal year ended

			Fiscal year ended August 2, 2014			Thirty-nine weeks ended August 2, 2014			Thirteen weeks ended November 2, 2013			Fiscal year ended
	Thirty-nine weeks ended May 2, 2015		Fiscal year ended August 2, 2014			Thirty-nine weeks ended August 2, 2014			Thirteen weeks ended November 2, 2013			August 3, 2013		July 28, 2012		July 30, 2011		July 31, 2010
(dollars in millions)	(Successor)		(Combined)			(Successor)			(Predecessor)			(Predecessor)		(Predecessor)		(Predecessor)		(Predecessor)
Net earnings (loss)	$	47.8	$	(147.2	)	$	(134.1	)	$	(13.1	)	$	163.7	$	140.1	$	31.6	$	(1.8	)
Pre-tax adjustments to eliminate impact of purchase accounting:
Amortization of inventory step-up(a)		6.8		129.6			129.6			—			—		—		—		—
Amortization of intangible assets		107.4		160.3			148.6			11.7			47.4		50.1		62.5		73.3
Incremental depreciation charges on step-up in property & equipment(j)		20.5		10.5			9.1			1.5			5.5		5.2		6.3		7.0
Incremental rent expense(b)		8.2		9.3			8.5			0.8			4.0		4.5		4.3		4.3
Transaction and other costs(c)		15.1		164.8			55.4			109.4			—		—		—		—
Other pre-tax adjustments:
Non-cash stock-based compensation		6.4		8.8			6.2			2.5			9.7		6.9		3.9		10.1
Equity in loss of foreign e-commerce retailer(d)		—		5.1			3.6			1.5			13.1		1.5		—		—
Expenses related to cyber-attack(e)		4.1		12.6			12.6			—			—		—		—		—
Management fee due to Former Sponsors(f)		—		2.8			—			2.8			10.0		10.0		10.0		9.2
Expenses incurred in connection with openings of new stores/remodels of existing stores(g)		9.3		5.8			4.0			1.8			5.1		6.6		1.7		3.1
Other non-recurring expenses(h)		8.8		10.7			10.5			0.2			5.4		6.2		—		—

Total pre-tax adjustments		186.8		520.4			388.2			132.3			100.3		91.0		88.8		106.9
Tax impact of adjustments(k)		73.2		204.0			152.2			51.9			39.3		35.7		34.8		41.9

Adjustments to net earnings (loss), net of tax		113.6		316.4			236.0			80.4			61.0		55.3		54.0		65.0

Adjusted Net Earnings(i)	$	161.4	$	169.2		$	101.9		$	67.3		$	224.7	$	195.4	$	85.6	$	63.2

(a): The carrying values of inventories acquired in connection with the Acquisition and the acquisition of MyTheresa were stepped up to estimated fair value as of the respective acquisition dates and amortized into cost of goods sold as the acquired inventories were sold.
(b): Rental obligations and deferred real estate credits were revalued at fair value in connection with the Acquisition. These fair value adjustments increase post-acquisition rent expense.
(c): Amounts relate to costs and expenses incurred in connection with the Acquisition and the acquisition of MyTheresa.
(d): Amounts relate to our equity in losses incurred in connection with our prior non-controlling investment in a foreign e-commerce retailer. See Note 14 of the Notes to Consolidated Financial Statements.
(e): For a further description of the cyber-attack, see "Risk Factors—Risks Related to Our Business and Industry—A breach in information privacy could negatively impact our operations" and Note 14 of the Notes to Consolidated Financial Statements.
(f): Amounts represent management fees paid to the Former Sponsors (as defined below) prior to the Acquisition. See "Certain Relationships and Related Party Transactions."
(g): Amounts represent direct and incremental expenses incurred in connection with the openings of new stores as well as remodels to our existing stores.
(h): Amounts consist primarily of expenses incurred in connection with NMG One and non-recurring settlements of class action litigation claims.
(i): Further details of Adjusted EBITDA and Adjusted Net Earnings are as follows:

	Last twelve months ended May 2, 2015		Thirty-nine weeks ended May 3, 2014

Adjusted EBITDA	$	714.0	$	587.1
Adjusted Net Earnings		160.2		170.5

(j): The carrying values of our property and equipment acquired in connection with the Acquisition and the acquisition of MyTheresa were stepped up to estimated fair value as of the respective acquisition dates. These fair value adjustments are being depreciated over the useful lives of the acquired property and equipment.
(k): Tax effect of adjustments to net earnings (loss) at our incremental tax rate of 39.2%.

(8): Amounts are net of developer contributions of $30.5 million, $5.7 million, $5.7 million, $0.0 million, $7.2 million, $10.6 million, $10.5 million and $14.4 million, respectively, for the periods presented.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes and other financial information appearing elsewhere in this prospectus. This discussion contains forward-looking statements. See "Special Note Regarding Forward-Looking Statements." Our actual results could differ materially from those anticipated in the forward-looking statements as a result of many factors, including those discussed in "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Results" and elsewhere in this prospectus.

OVERVIEW

Neiman Marcus Group, Inc. (f/k/a NM Mariposa Holdings, Inc.) is a holding company that conducts operations through its indirect wholly owned subsidiary, Neiman Marcus Group LTD LLC and its subsidiaries (NMG). NMG is a luxury retailer conducting operations principally under the Neiman Marcus, Bergdorf Goodman and MyTheresa brand names. References to "we," "our" and "us" are used to refer to the Company or collectively to the Company and its subsidiaries, as appropriate to the context.

On October 25, 2013, NMG merged with and into Mariposa Merger Sub LLC (Mariposa) pursuant to an Agreement and Plan of Merger, dated September 9, 2013, by and among NM Mariposa Holdings, Inc., Mariposa and NMG, with NMG surviving the merger (the Acquisition). As a result of the Acquisition and the Conversion (as defined below), the Company is now a direct parent of Mariposa Intermediate Holdings LLC (Holdings), which in turn is a direct parent of NMG. The Company is owned by entities affiliated with Ares Management, L.P. and Canada Pension Plan Investment Board (together, the Sponsors) and certain co-investors. Previously, The Neiman Marcus Group, Inc. (Predecessor) was a subsidiary of Newton Holding, LLC, which was controlled by investment funds affiliated with TPG Global, LLC (collectively with its affiliates, TPG) and Warburg Pincus LLC (together with TPG, the Former Sponsors). On October 28, 2013, NMG and the Predecessor each converted from a Delaware corporation to a Delaware limited liability company (the Conversion).

We conduct our luxury retail operations in an integrated omni-channel model consisting of both specialty retail stores and online websites. As a result, we view and report our specialty retail stores and online operations as a single, omni-channel reporting segment.

The accompanying Consolidated Financial Statements and Condensed Consolidated Financial Statements are presented as "Predecessor" or "Successor" to indicate whether they relate to the period preceding the Acquisition or the period succeeding the Acquisition, respectively. The Acquisition and the allocation of the purchase price have been recorded for accounting purposes as of November 2, 2013, the end of our first quarter of fiscal year 2014.

We have prepared our presentation and discussion of the results of operations for the fiscal year ended August 2, 2014 by comparing the results of operations of the Predecessor for the fiscal year ended August 3, 2013 to the combined amounts obtained by adding the operations and cash flows for the Predecessor thirteen week period ended November 2, 2013 and the Successor thirty-nine week period ended August 2, 2014. We have also prepared our presentation and discussion of the results of operations for the thirty-nine weeks ended May 3, 2014 by adding the operations and cash flows for the Predecessor thirteen week period ended November 2, 2013 and the Successor twenty-six week period ended May 3, 2014. Although this combined presentation does not comply with GAAP, we believe that it assists readers in understanding and assessing the trends and significant changes in our results of operations, provides a more meaningful method of comparison and does not impact the drivers of the financial changes between the relevant periods. The combined results of operations have not been

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prepared on a pro forma basis under applicable regulations and may not reflect the actual results we would have achieved absent the Acquisition and may not be predictive of future results of operations. For a presentation of our results of operations for the fiscal year ended August 2, 2014 and the thirty-nine weeks ended May 3, 2014 on a GAAP basis showing the separate Predecessor and Successor periods, see the accompanying Consolidated Financial Statements and Condensed Consolidated Financial Statements.

Our fiscal year ends on the Saturday closest to July 31. Like many other retailers, we follow a 4-5-4 reporting calendar, which means that each fiscal quarter consists of thirteen weeks divided into periods of four weeks, five weeks and four weeks. This resulted in an extra week in fiscal year 2013 (the 53^rd week). All references to (i) the third quarter of fiscal year 2015 relate to the thirteen weeks ended May 2, 2015, (ii) the third quarter of fiscal year 2014 relate to the thirteen weeks ended May 3, 2014, (iii) year-to-date fiscal 2015 relate to the thirty-nine weeks ended May 2, 2015, (iv) year-to-date fiscal 2014 relate to the combined thirty-nine weeks ended May 3, 2014 (calculated as described above), (v) fiscal year 2014 relate to the combined fifty-two weeks ended August 2, 2014 (calculated as described above), (vi) fiscal year 2013 relate to the fifty-three weeks ended August 3, 2013 and (vii) fiscal year 2012 relate to the fifty-two weeks ended July 28, 2012. References to fiscal year 2015 and years thereafter relate to our fiscal years for such periods.

In connection with the Acquisition, the Company incurred substantial new indebtedness, in part in replacement of former indebtedness. See "Liquidity and Capital Resources." In addition, the purchase price paid in connection with the Acquisition has been allocated to state the acquired assets and liabilities at fair value. The purchase accounting adjustments increased the carrying value of our property and equipment and inventory, revalued our intangible assets related to our tradenames, customer lists and favorable lease commitments and revalued our long-term benefit plan obligations, among other things. As a result, our Successor financial statements subsequent to the Acquisition are not necessarily comparable to our Predecessor financial statements.

KEY FACTORS AFFECTING OUR RESULTS

Revenues. We generate our revenues from the sale of luxury merchandise. Components of our revenues include:

•: Sales of merchandise—Revenues are recognized at the later of the point-of-sale or the delivery of goods to the customer. Revenues are reduced when our customers return goods previously purchased. We maintain reserves for anticipated sales returns primarily based on our historical trends. Revenues exclude sales taxes collected from our customers.
•: Delivery and processing—We generate revenues from delivery and processing charges related to certain merchandise deliveries to our customers.

Our revenues can be affected by the following factors:

•: general economic conditions;
•: changes in the level of consumer spending generally and, specifically, on luxury goods;
•: our ability to acquire goods meeting customers' tastes and preferences;
•: changes in the level of full-price sales;
•: changes in the level and timing of promotional events conducted;
•: changes in the level of delivery and processing revenues collected from our customers;
•: our ability to successfully implement our expansion and growth strategies; and
•: changes in the composition and the rate of growth of our sales transacted in store and online.

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In addition, our revenues are seasonal, as discussed below under "Seasonality."

Cost of goods sold including buying and occupancy costs (excluding depreciation). COGS consists of the following components:

•: Inventory costs—We utilize the retail inventory method of accounting. Under the retail inventory method, the valuation of inventories at cost and the resulting gross margins are determined by applying a calculated cost-to-retail ratio, for various groupings of similar items, to the retail value of our inventories. The cost of the inventory reflected on the Condensed Consolidated Financial Statements is decreased by charges to cost of goods sold at average cost and the retail value of the inventory is lowered through the use of markdowns. Our net earnings are negatively impacted when merchandise is marked down. With the introduction of new fashions in the first and third fiscal quarters of each fiscal year and our emphasis on full-price selling in these quarters, a lower level of markdowns and higher margins are characteristic of these quarters.
•: Buying costs—Buying costs consist primarily of salaries and expenses incurred by our merchandising and buying operations.
•: Occupancy costs—Occupancy costs consist primarily of rent, property taxes and operating costs of our retail, distribution and support facilities. A significant portion of our buying and occupancy costs are fixed in nature and are not dependent on the revenues we generate.
•: Delivery and processing costs—Delivery and processing costs consist primarily of delivery charges we pay to third party carriers and other costs related to the fulfillment of customer orders not delivered at the point-of-sale.

Consistent with industry business practice, we receive allowances from certain of our vendors in support of the merchandise we purchase for resale. Certain allowances are received to reimburse us for markdowns taken or to support the gross margins that we earn in connection with the sales of the vendor's merchandise. These allowances result in an increase to gross margin when we earn the allowances and they are approved by the vendor. Other allowances we receive represent reductions to the amounts we pay to acquire the merchandise. These allowances reduce the cost of the acquired merchandise and are recognized at the time the goods are sold. We received vendor allowances of $55.0 million, or 1.4% of revenues, in year-to-date fiscal 2015 and $52.0 million, or 1.4% of revenues, in year-to-date fiscal 2014. The amounts of vendor allowances we receive fluctuate based on the level of markdowns taken and did not have a significant impact on the year-over-year change in gross margin during year-to-date fiscal 2015 and 2014.

Changes in our COGS as a percentage of revenues can be affected by the following factors:

•: our ability to order an appropriate amount of merchandise to match customer demand and the related impact on the level of net markdowns and promotions costs incurred;
•: customer acceptance of and demand for the merchandise we offer in a given season and the related impact of such factors on the level of full-price sales;
•: factors affecting revenues generally, including pricing and promotional strategies, product offerings and actions taken by competitors;
•: changes in delivery and processing costs and our ability to pass such costs on to our customers;
•: changes in occupancy costs primarily associated with the opening of new stores or distribution facilities; and
•: the amount of vendor reimbursements we receive during the reporting period.

Selling, general and administrative expenses (excluding depreciation). SG&A principally consists of costs related to employee compensation and benefits in the selling and administrative support areas

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and advertising and marketing costs. A significant portion of our SG&A expenses is variable in nature and is dependent on the revenues we generate.

Advertising costs consist primarily of (i) online marketing costs, (ii) advertising costs incurred related to the production of the photographic content for our websites and (iii) costs incurred related to the production, printing and distribution of our print catalogs and other promotional materials mailed to our customers. We receive advertising allowances from certain of our merchandise vendors. Substantially all the advertising allowances we receive represent reimbursements of direct, specific and incremental costs that we incur to promote the vendor's merchandise in connection with our various advertising programs, primarily catalogs and other print media. Advertising allowances fluctuate based on the level of advertising expenses incurred and are recorded as a reduction of our advertising costs when earned. Advertising allowances aggregated approximately $47.9 million, or 1.2% of revenues, in year-to-date fiscal 2015 and $47.4 million, or 1.3% of revenues, in year-to-date fiscal 2014.

We also receive allowances from certain merchandise vendors in connection with compensation programs for employees who sell the vendor's merchandise. These allowances are netted against the related compensation expenses that we incur. Amounts received from vendors related to compensation programs were $59.3 million, or 1.5% of revenues, in year-to-date fiscal 2015 and $56.4 million, or 1.5% of revenues, in year-to-date fiscal 2014.

Changes in our SG&A expenses are affected primarily by the following factors:

•: changes in the level of our revenues;
•: changes in the number of sales associates, which are primarily due to new store openings and expansion of existing stores, and the health care and related benefits expenses incurred as a result of such changes;
•: changes in expenses incurred in connection with our advertising and marketing programs; and
•: changes in expenses related to employee benefits due to general economic conditions such as rising health care costs.

Income from credit card program. We maintain a proprietary credit card program through which credit is extended to customers and have a related marketing and servicing alliance with affiliates of Capital One. Pursuant to the Program Agreement, Capital One currently offers credit cards and non-card payment plans under both the "Neiman Marcus" and "Bergdorf Goodman" brand names.

We receive payments from Capital One based on sales transacted on our proprietary credit cards. We recognize income from our credit card program when earned. In the future, the income from our credit card program may:

•: increase or decrease based upon the level of utilization of our proprietary credit cards by our customers;
•: increase or decrease based upon the overall profitability and performance of the credit card portfolio due to the level of bad debts incurred or changes in interest rates, among other factors;
•: increase or decrease based upon future changes to our historical credit card program in response to changes in regulatory requirements or other changes related to, among other things, the interest rates applied to unpaid balances and the assessment of late fees; and
•: decrease based upon the level of future marketing and other services we provide to Capital One.

Effective income tax rate. Our effective income tax rate may fluctuate from period to period due to a variety of factors, including changes in our assessment of certain tax contingencies, valuation allowances, changes in federal and state tax laws, outcomes of administrative audits, the impact of accounting for stock-based compensation, changes in our corporate structure, the impact of other

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discrete or non-recurring items and the mix of earnings among our U.S. and international operations, where the statutory rates are generally lower than in the United States. As a result, our effective income tax rate may vary significantly from the federal statutory tax rate.

For example, our effective income tax rate was 43.6% on the earnings for the third quarter of fiscal year 2015 and 58.5% on the loss for the third quarter of fiscal year 2014, primarily due to (i) state income taxes, (ii) with respect to the third quarter of fiscal year 2015, the non-deductible portion of transaction and other costs incurred in connection with our acquisition of MyTheresa, and (iii) with respect to the third quarter of fiscal year 2014, the lack of a U.S. tax benefit related to the losses from our prior investment in a foreign e-commerce retailer.

While our future effective income tax rate will depend on the factors described above, we currently anticipate that our effective income tax rate in future periods will be closer to our historical effective income tax rates at approximately 39.2%.

Seasonality

We conduct our selling activities in two primary selling seasons—Fall and Spring. The Fall season is comprised of our first and second fiscal quarters and the Spring season is comprised of our third and fourth fiscal quarters.

Our first fiscal quarter is generally characterized by a higher level of full-price sales with a focus on the initial introduction of Fall season fashions. Marketing activities designed to stimulate customer purchases, a lower level of markdowns and higher margins are characteristic for this quarter. The second fiscal quarter is more focused on promotional activities related to the December holiday season, the early introduction of resort season collections from certain designers and the sale of Fall season goods on a marked-down basis. As a result, margins are typically lower in the second fiscal quarter. However, due to the seasonal increase in revenues that occurs during the holiday season, the second fiscal quarter is typically the quarter in which our revenues are the highest and in which expenses as a percentage of revenues are the lowest. Our working capital requirements are also the greatest in the first and second fiscal quarters as a result of higher seasonal requirements.

Our third fiscal quarter is generally characterized by a higher level of full-price sales with a focus on the initial introduction of Spring season fashions. Marketing activities designed to stimulate customer purchases, a lower level of markdowns and higher margins are again characteristic for this quarter. Revenues are generally the lowest in the fourth fiscal quarter with a focus on promotional activities offering Spring season goods to customers on a marked-down basis, resulting in lower margins during the quarter. Our working capital requirements are typically lower in the third and fourth fiscal quarters compared to the other quarters.

A large percentage of our merchandise assortment, particularly in the apparel, fashion accessories and shoe categories, is ordered months in advance of the introduction of such goods. For example, women's apparel, men's apparel, shoes and handbags are typically ordered six to nine months in advance of the products being offered for sale while jewelry and other categories are typically ordered three to six months in advance. As a result, our success depends in large part on our ability to identify fashion trends and consumer shopping preferences and to identify and react effectively to rapidly changing consumer demands in a timely manner.

We monitor the sales performance of our inventories throughout each season. We seek to order additional goods to supplement our original purchasing decisions when the level of customer demand is higher than originally anticipated. However, in certain merchandise categories, particularly fashion apparel, our ability to purchase additional goods can be limited. This can result in lost sales opportunities in the event of higher than anticipated demand for the merchandise we offer or a higher than anticipated level of consumer spending. Conversely, in the event we buy merchandise that is not

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accepted by our customers or the level of consumer spending is less than we anticipated, we could incur a higher than anticipated level of markdowns, net of vendor allowances, resulting in lower operating profits. Any failure on our part to anticipate, identify and respond effectively to these changes could adversely affect our business, financial condition and results of operations.

RESULTS OF OPERATIONS

Performance Summary for the Thirteen and Thirty-nine Weeks Ended May 2, 2015

The following table sets forth certain items expressed as percentages of net revenues for the periods indicated.

	Thirteen weeks ended May 2, 2015			Thirteen weeks ended May 3, 2014			Thirty-nine weeks ended May 2, 2015			Thirty-nine weeks ended May 3, 2014			Twenty-six weeks ended May 3, 2014			Thirteen weeks ended November 2, 2013

	(Successor)			(Successor)			(Successor)			(Combined)			(Successor)			(Predecessor)
Revenues		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Cost of goods sold including buying and occupancy costs (excluding depreciation)		61.9			64.3			63.7			66.7			69.4			60.7
Selling, general and administrative expenses (excluding depreciation)		23.4			23.3			22.8			22.6			22.2			23.6
Income from credit card program		(1.0	)		(1.1	)		(1.0	)		(1.2	)		(1.1	)		(1.3	)
Depreciation expense		3.9			3.1			3.5			2.9			2.8			3.0
Amortization of intangible assets		1.3			3.1			1.7			2.1			2.8			0.6
Amortization of favorable lease commitments		1.1			1.2			1.0			0.8			1.0			0.4
Other expenses		0.5			0.7			0.7			5.0			2.8			10.1

Operating earnings		8.8			5.4			7.6			0.9			0.1			2.8
Interest expense, net		6.0			7.1			5.5			5.3			6.2			3.3

Earnings (loss) before income taxes		2.9			(1.7	)		2.1			(4.4	)		(6.1	)		(0.5	)
Income tax expense (benefit)		1.3			(1.0	)		0.9			(1.6	)		(2.6	)		0.7

Net earnings (loss)		1.6	%		(0.7	)%		1.2	%		(2.8	)%		(3.5	)%		(1.2	)%

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Set forth in the following table is certain summary information with respect to our operations for the periods indicated.

	Thirteen weeks ended May 2, 2015			Thirteen weeks ended May 3, 2014			Thirty-nine weeks ended May 2, 2015			Thirty-nine weeks ended May 3, 2014			Twenty-six weeks ended May 3, 2014			Thirteen weeks ended November 2, 2013

	(Successor)			(Successor)			(Successor)			(Combined)			(Successor)			(Predecessor)
CHANGE IN COMPARABLE REVENUES(1)
Total revenues		2.2	%		5.9	%		4.5	%		5.7	%		5.7	%		5.7	%
Online revenues		13.3	%		12.4	%		14.6	%		13.3	%		14.1	%		11.2	%
SALES PER SQUARE FOOT(2)	$	140		$	140		$	457		$	446		$	308		$	138
STORE COUNT
Neiman Marcus and Bergdorf Goodman full-line stores open at end of period		43			43			43			43			43			43
Last Call stores open at end of period		42			36			42			36			36			36

(1): Comparable revenues include (1) revenues derived from our retail stores open for more than fifty-two weeks, including stores that have been relocated or expanded and (2) revenues from our online operations. Comparable revenues exclude revenues of (1) closed stores, (2) designer websites created and operated pursuant to contractual arrangements with certain designer brands that had expired by the first quarter of fiscal year 2015 and (3) MyTheresa, which was acquired in October 2014.
(2): Sales per square foot are calculated as net sales of our Neiman Marcus and Bergdorf Goodman full-line stores for the applicable period divided by weighted average square footage. Weighted average square footage includes a percentage of period-end square footage for new and closed stores equal to the percentage of the period during which they were open.

Results of Operations for the Thirteen Weeks Ended May 2, 2015 Compared to the Thirteen Weeks Ended May 3, 2014

Revenues. Our revenues for the third quarter of fiscal year 2015 of $1,220.1 million increased by $55.4 million, or 4.8%, from $1,164.7 million in the third quarter of fiscal year 2014. Comparable revenues for the third quarter of fiscal year 2015 were $1,169.0 million compared to $1,143.9 million in the third quarter of fiscal year 2014, representing an increase of 2.2%. New stores generated revenues of $6.3 million and MyTheresa generated revenues of $44.8 million in the third quarter of fiscal year 2015. In addition, revenues generated by our online operations aggregated $330.4 million, representing a comparable increase of 13.3% from the third quarter of the prior year. Revenues from MyTheresa are included in revenues generated by our online operations but are excluded from all calculations of comparable revenues.

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Cost of goods sold including buying and occupancy costs (excluding depreciation). COGS for the third quarter of fiscal year 2015 compared to the third quarter of fiscal year 2014 were:

	Thirteen weeks ended

	May 2, 2015 (Successor)						May 3, 2014 (Successor)
(in millions, except percentages)	$			% of revenues			$			% of revenues
COGS, as reported	$	755.0			61.9	%	$	749.0			64.3	%
Less: amortization of inventory step-up		(3.5	)		(0.3	)		(30.6	)		(2.6	)

COGS, before purchase accounting adjustments	$	751.5			61.6	%	$	718.4			61.7	%

As a result of purchase accounting adjustments to revalue acquired inventories and subsequent sale of a portion of the acquired inventories, COGS was increased by $3.5 million, or 0.3% of revenues, in the third quarter of fiscal year 2015 (related to the MyTheresa acquisition) and $30.6 million, or 2.6% of revenues, in the third quarter of fiscal year 2014 (related to the Acquisition).

COGS before purchase accounting adjustments decreased to 61.6% of revenues in the third quarter of fiscal year 2015 from 61.7% of revenues in the third quarter of fiscal year 2014. The decrease in COGS before purchase accounting adjustments of 0.1% of revenues was primarily due to the leveraging of buying and occupancy costs on higher revenues.

Selling, general and administrative expenses (excluding depreciation). SG&A expenses as a percentage of revenues increased to 23.4% of revenues in the third quarter of fiscal year 2015 compared to 23.3% of revenues in the third quarter of fiscal year 2014. The net increase in SG&A expenses by 0.1% of revenues in the third quarter of fiscal year 2015 was primarily due to:

•: higher expenses of approximately 0.4% of revenues driven by the recent expansion of our small format stores, the remodels of our full-line stores and the acquisition of MyTheresa; partially offset by
•: lower current incentive compensation costs of approximately 0.4% of revenues.

Income from credit card program. Income from our credit card program was $11.9 million, or 1.0% of revenues, in the third quarter of fiscal year 2015 compared to $13.2 million, or 1.1% of revenues, in the third quarter of fiscal year 2014, reflecting the decrease in income generated by our credit card portfolio.

Depreciation and amortization expenses. Depreciation expense was $48.1 million, or 3.9% of revenues, in the third quarter of fiscal year 2015 compared to $36.6 million, or 3.1% of revenues, in the third quarter of fiscal year 2014. The increase in depreciation expense by 0.8% of revenues in the third quarter of fiscal year 2015 was primarily due to higher levels of capital spending. Amortization of intangible assets (primarily customer lists and favorable lease commitments) aggregated $29.7 million, or 2.4% of revenues, in the third quarter of fiscal year 2015 compared to $49.5 million, or 4.3% of revenues, in the third quarter of fiscal year 2014. The decrease in amortization expense by 1.9% of revenues in the third quarter of fiscal year 2015 was due to lower amortization charges with respect to our customer lists in the third quarter of fiscal year 2015.

Other expenses. Other expenses for the third quarter of fiscal year 2015 aggregated $5.6 million, or 0.5% of revenues, compared to $8.4 million, or 0.7% of revenues, in the third quarter of fiscal year 2014. Other expenses in the third quarter of fiscal year 2015 include (i) costs associated with our ongoing investments in our omni-channel initiative, (ii) costs incurred in connection with the MyTheresa acquisition and (iii) investigative, legal and other expenses, net of insurance recovery, related to the cyber-attack on our systems discovered in January 2014. Other expenses in the third quarter of fiscal year 2014 include (i) investigative, legal and other expenses incurred in connection

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with the Cyber-Attack, (ii) costs associated with ongoing investments in our omni-channel initiative and (iii) other non-recurring expenses.

Operating earnings. In the third quarter of fiscal year 2015, we generated operating earnings of $108.0 million, or 8.8% of revenues, compared to $63.0 million, or 5.4% of revenues, in the third quarter of fiscal year 2014. Costs and expenses related to the acquisitions aggregated $5.5 million, or 0.5% of revenues, in the third quarter of fiscal year 2015 and $30.6 million, or 2.6% of revenues, in the third quarter of fiscal year 2014.

Interest expense. Net interest expense was $72.8 million, or 6.0% of revenues, in the third quarter of fiscal year 2015 and $82.2 million, or 7.1% of revenues, for the third quarter of fiscal year 2014. Excluding the $7.9 million loss on debt extinguishment, net interest expense decreased by $1.5 million in the third quarter of fiscal year 2015. The significant components of interest expense are as follows:

	Thirteen weeks ended

	May 2, 2015			May 3, 2014
(in millions)	(Successor)			(Successor)
Asset-Based Revolving Credit Facility	$	0.4		$	—
Senior Secured Term Loan Facility		31.3			34.0
Cash Pay Notes		19.2			19.0
PIK Toggle Notes		13.1			13.0
2028 Debentures		2.2			2.2
Amortization of debt issue costs		6.1			5.8
Other, net		0.9			0.6
Capitalized interest		(0.5	)		(0.3	)

	$	72.8		$	74.3
Loss on debt extinguishment		—			7.9

Interest expense, net	$	72.8		$	82.2

Income tax expense (benefit). Our effective income tax rate was 43.6% for the third quarter of fiscal year 2015 and 58.5% on the loss for the third quarter of fiscal year 2014. Our effective income tax rates exceeded the federal statutory tax rate primarily due to:

•: non-deductible portion of transaction and other costs incurred in connection with our acquisition of MyTheresa;
•: state income taxes; and
•: with respect to the third quarter of fiscal year 2014, the lack of a U.S. tax benefit related to the losses from our prior investment in a foreign e-commerce retailer.

We file income tax returns in the U.S. federal jurisdiction and various state, local and foreign jurisdictions. The Internal Revenue Service (IRS) is currently auditing our fiscal year 2012 and short-year 2013 federal income tax returns. With respect to state, local and foreign jurisdictions, with limited exceptions, we are no longer subject to income tax audits for fiscal years before 2011. We believe our recorded tax liabilities as of May 2, 2015 are sufficient to cover any potential assessments to be made by the IRS or other taxing authorities upon the completion of their examinations and we will continue to review our recorded tax liabilities for potential audit assessments based upon subsequent events, new information and future circumstances. We believe it is reasonably possible that additional adjustments in the amounts of our unrecognized tax benefits could occur within the next twelve months as a result of settlements with tax authorities or expiration of statutes of limitation. At this time, we do not believe such adjustments will have a material impact on our Condensed Consolidated Financial Statements.

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Results of Operations for the Thirty-nine Weeks Ended May 2, 2015 Compared to the Thirty-nine Weeks Ended May 3, 2014

Revenues. Our revenues for year-to-date fiscal 2015 of $3,928.4 million increased by $201.7 million, or 5.4%, from $3,726.7 million in year-to-date fiscal 2014. Comparable revenues for year-to-date fiscal 2015 were $3,826.8 million compared to $3,662.6 million in year-to-date fiscal 2014, representing an increase of 4.5%. New stores generated revenues of $20.0 million and MyTheresa generated revenues of $80.6 million in year-to-date fiscal 2015. In addition, revenues generated by our online operations aggregated $1,014.0 million, representing a comparable increase of 14.6% from the prior year fiscal period. Revenues from MyTheresa are included in revenues generated by our online operations but are excluded from all calculations of comparable revenues.

Cost of goods sold including buying and occupancy costs (excluding depreciation). COGS for year-to-date fiscal 2015 compared to year-to-date fiscal 2014 were:

	Thirty-nine weeks ended

	May 2, 2015 (Successor)						May 3, 2014 (Combined)
(in millions, except percentages)	$			% of revenues			$			% of revenues
COGS, as reported	$	2,502.6			63.7	%	$	2,487.3			66.7	%
Less: amortization of inventory step-up		(6.8	)		(0.2	)		(129.6	)		(3.5	)

COGS, before purchase accounting adjustments	$	2,495.8			63.5	%	$	2,357.7			63.2	%

As a result of purchase accounting adjustments to revalue acquired inventories and subsequent sale of a portion of the acquired inventories, COGS was increased by $6.8 million, or 0.2% of revenues, in year-to-date fiscal 2015 (related to the MyTheresa acquisition) and $129.6 million, or 3.5% of revenues, in year-to-date fiscal 2014 (related to the Acquisition).

COGS before purchase accounting adjustments increased to 63.5% of revenues in year-to-date fiscal 2015 from 63.2% of revenues in year-to-date fiscal 2014. The increase in COGS before purchase accounting adjustments of 0.3% of revenues was primarily due to higher delivery and processing net costs due to the free shipping/free returns policy we implemented on October 1, 2013 for our Neiman Marcus and Bergdorf Goodman brands.

Selling, general and administrative expenses (excluding depreciation). SG&A expenses as a percentage of revenues increased to 22.8% of revenues in year-to-date fiscal 2015 compared to 22.6% of revenues in year-to-date fiscal 2014. The net increase in SG&A expenses by 0.2% of revenues in year-to-date fiscal 2015 was primarily due to:

•: higher expenses of approximately 0.4% of revenues driven by the recent expansion of our small format stores, the remodels of our full-line stores and the acquisition of MyTheresa; partially offset by
•: lower current incentive compensation requirements of approximately 0.2% of revenues.

Income from credit card program. Income from our credit card program was $40.8 million, or 1.0% of revenues, in year-to-date fiscal 2015 compared to $43.1 million, or 1.2% of revenues, in year-to-date fiscal 2014, reflecting the decrease in income generated by our credit card portfolio.

Depreciation and amortization expenses. Depreciation expense was $136.6 million, or 3.5% of revenues, in year-to-date fiscal 2015 compared to $107.6 million, or 2.9% of revenues, in year-to-date fiscal 2014. The increase in depreciation expense by 0.6% of revenues in year-to-date fiscal 2015 was

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primarily due to (i) higher asset values attributable to fair value adjustments to our assets recorded in connection with the purchase price allocation to reflect the Acquisition and (ii) higher capital spending. Amortization of intangible assets (primarily customer lists and favorable lease commitments) aggregated $107.4 million, or 2.7% of revenues, in year-to-date fiscal 2015 compared to $110.8 million, or 3.0% of revenues, in year-to-date fiscal 2014. The decrease in amortization expense by 0.3% of revenues in year-to-date fiscal 2015 was due to lower amortization charges with respect to our customer lists in year-to-date fiscal 2015.

Other expenses. Other expenses for year-to-date fiscal 2015 aggregated $28.1 million, or 0.7% of revenues, compared to $187.9 million, or 5.0% of revenues, in year-to-date fiscal 2014. Other expenses in year-to-date fiscal 2015 include (i) costs incurred in connection with the MyTheresa acquisition, (ii) costs associated with our ongoing investments in our omni-channel initiative, (iii) investigative, legal and other expenses, net of insurance recovery, incurred in connection with the Cyber-Attack discovered in January 2014 and (iv) other non-recurring expenses. Other expenses in year-to-date fiscal 2014 include (i) transaction costs related to the Acquisition, (ii) investigative, legal and other expenses, net of insurance recovery, incurred in connection with the Cyber-Attack, (iii) costs associated with ongoing investments in our omni-channel initiative and (iv) other non-recurring expenses.

Operating earnings. In year-to-date fiscal 2015, we generated operating earnings of $299.8 million, or 7.6% of revenues, compared to $33.8 million, or 0.9% of revenues, in year-to-date fiscal 2014. Costs and expenses related to the acquisitions aggregated $22.0 million, or 0.6% of revenues, in year-to-date fiscal 2015 and $292.3 million, or 7.8% of revenues, in year-to-date fiscal 2014.

Interest expense. Net interest expense was $217.9 million, or 5.5% of revenues, in year-to-date fiscal 2015 and $197.4 million, or 5.3% of revenues, for year-to-date fiscal 2014. Excluding the $7.9 million loss on debt extinguishment, net interest expense increased by $28.4 million primarily due to the higher level of indebtedness incurred in connection with the Acquisition. The significant components of interest expense are as follows:

	Thirty-nine weeks ended

	May 2, 2015			May 3, 2014
	(Successor)			(Combined)
(in millions)
Asset-Based Revolving Credit Facility	$	1.1		$	0.4
Senior Secured Term Loan Facility		94.3			75.0
Cash Pay Notes		57.6			41.2
PIK Toggle Notes		39.4			28.1
2028 Debentures		6.7			6.7
Former Asset-Based Revolving Credit Facility		—			0.5
Former Senior Secured Term Loan Facility		—			22.5
Amortization of debt issue costs		18.4			13.5
Other, net		2.1			2.4
Capitalized interest		(1.7	)		(0.7	)

	$	217.9		$	189.5
Loss on debt extinguishment		—			7.9

Interest expense, net	$	217.9		$	197.4

Income tax expense (benefit). Our effective income tax rate was 41.6% for year-to-date fiscal 2015, 41.9% on the loss for the twenty-six weeks ended May 3, 2014 and 152.9% on the loss for the first

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quarter of fiscal year 2014. Our effective income tax rate for year-to-date fiscal 2015 exceeded the federal statutory tax rate primarily due to:

•: non-deductible portion of transaction and other costs incurred in connection with our acquisition of MyTheresa; and
•: state income taxes.

Our effective income tax rates for year-to-date fiscal 2014 exceeded the federal statutory tax rates primarily due to:

•: non-deductible portion of transaction costs incurred in connection with the Acquisition;
•: state income taxes; and
•: the lack of a U.S. tax benefit related to the losses from our prior investment in a foreign e-commerce retailer.

Performance Summary for the Fiscal Years Ended August 2, 2014, August 3, 2013 and July 28, 2012

The following table sets forth certain items expressed as percentages of net revenues for the periods indicated:

	Fiscal year ended August 2, 2014			Thirty-nine weeks ended August 2, 2014			Thirteen weeks ended November 2, 2013			Fiscal year ended August 3, 2013(a)			Fiscal year ended July 28, 2012

	(Combined)			(Successor)			(Predecessor)			(Predecessor)			(Predecessor)
Revenues		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Cost of goods sold including buying and occupancy costs (excluding depreciation)		67.1			69.1			60.7			64.4			64.3
Selling, general and administrative expenses (excluding depreciation)		22.8			22.5			23.6			22.5			23.2
Income from credit card program		(1.1	)		(1.1	)		(1.3	)		(1.1	)		(1.2	)
Depreciation expense		3.0			3.1			3.0			3.0			3.0
Amortization of intangible assets		2.4			2.9			0.6			0.6			0.7
Amortization of favorable lease commitments		0.9			1.1			0.4			0.4			0.4
Other expenses		4.0			2.2			10.1			0.5			0.3

Operating earnings		0.8			0.2			2.8			9.6			9.3
Interest expense, net		5.6			6.3			3.3			3.6			4.0

(Loss) earnings before income taxes		(4.7	)		(6.0	)		(0.5	)		6.0			5.3
Income tax (benefit) expense		(1.7	)		(2.4	)		0.7			2.4			2.0

Net (loss) earnings		(3.0	)%		(3.6	)%		(1.2	)%		3.5	%		3.2	%

(a): Percentages related to fiscal year 2013 include the results of operations of the 53^rd week. Summary financial information with respect to the 53^rd week of fiscal year 2013 is as follows:

(in millions)	Total

Revenues	$	61.9
Operating earnings		10.7

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Set forth in the following table is certain summary information with respect to our operations for the periods indicated.

	Fiscal year ended August 2, 2014			Thirty-nine weeks ended August 2, 2014			Thirteen weeks ended November 2, 2013			Fiscal year ended August 3, 2013(1)			Fiscal year ended July 28, 2012

	(Combined)			(Successor)			(Predecessor)			(Predecessor)			(Predecessor)
CHANGE IN COMPARABLE REVENUES(2)
Total revenues		5.5	%		5.4	%		5.7	%		4.9	%		7.9	%
Online revenues		13.4	%		14.0	%		11.2	%		15.8	%		16.1	%
SALES PER SQUARE FOOT(3)		578			440			138			552			535
STORE COUNT
Neiman Marcus and Bergdorf Goodman full-line stores open at end of period		43			43			43			43			44
Last Call stores open at end of period		38			38			36			36			33

(1): Fiscal year 2013 consists of the fifty-three weeks ended August 3, 2013, except where noted. In fiscal year 2013, we generated revenues of $61.9 million in the 53^rd week.
(2): Comparable revenues include (1) revenues derived from our retail stores open for more than fifty-two weeks, including stores that have been relocated or expanded and (2) revenues from our online operations. Comparable revenues exclude revenues of closed stores, including our Neiman Marcus store in Minneapolis, which we closed in January 2013. The calculation of the change in comparable revenues for fiscal year 2013 is based on revenues for the fifty-two weeks ended July 27, 2013 compared to revenues for the fifty-two weeks ended July 28, 2012.
(3): Sales per square foot are calculated as net sales of our Neiman Marcus and Bergdorf Goodman full-line stores for the applicable period divided by weighted average square footage. Weighted average square footage includes a percentage of period-end square footage for new and closed stores equal to the percentage of the period during which they were open. The calculation of sales per square foot for fiscal year 2013 is based on revenues for the fifty-two weeks ended July 27, 2013.

Results of Operations for the Fiscal Year Ended August 2, 2014 (Combined) Compared to the Fiscal Year Ended August 3, 2013 (Predecessor)

Revenues. Our revenues for fiscal year 2014 of $4,839.3 million increased by $191.1 million, or 4.1%, from $4,648.2 million in fiscal year 2013. Revenues generated by our online operations in fiscal year 2014 aggregated $1,154.2 million, representing a comparable increase of 13.4% from fiscal year 2013. New stores generated revenues of $12.9 million in fiscal year 2014.

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Comparable revenues for fiscal year 2014 were $4,826.4 million compared to $4,574.6 million for the fifty-two weeks ended July 27, 2013, representing an increase of 5.5%. Changes in comparable revenues by quarter were:



First fiscal quarter	5.7	%	5.4	%
Second fiscal quarter	5.5		5.3
Third fiscal quarter	5.9		3.6
Fourth fiscal quarter	4.9		5.4
Total fiscal year	5.5		4.9

Cost of goods sold including buying and occupancy costs (excluding depreciation). COGS for fiscal year 2014 compared to fiscal year 2013:

	Fiscal year ended

	August 2, 2014 (Combined)						August 3, 2013 (Predecessor)
(in millions, except percentages)	$			% of revenues			$		% of revenues
COGS, as reported	$	3,248.4			67.1	%	$	2,995.4		64.4	%
Less: amortization of inventory step-up		(129.6	)		(2.7	)		—		—

COGS, before purchase accounting adjustments	$	3,118.8			64.4	%	$	2,995.4		64.4	%

In connection with purchase accounting, we valued the acquired inventories to their estimated fair value at the Acquisition date, which resulted in an increase in the carrying value of the acquired inventories by $129.6 million. As the acquired inventories were sold, they were charged to COGS at their Acquisition date fair values. COGS were increased by $129.6 million in fiscal year 2014 as a result of the sale of our acquired inventories, which resulted in the increase of COGS as a percentage of revenues by 2.7%.

COGS before purchase accounting adjustments were 64.4% of revenues in both fiscal year 2014 and fiscal year 2013. COGS before purchase accounting adjustments, as a percentage of revenues, was comparable to the prior fiscal year primarily due to:

•: increased product margins of approximately 0.4% of revenues primarily due to lower markdowns and promotional costs; and
•: the leveraging of buying and occupancy costs on higher revenues by 0.1% of revenues; offset by
•: higher delivery and processing net costs of approximately 0.5% of revenues as a result of lower shipping and handling revenues collected from our customers. On October 1, 2013, we implemented free shipping/free returns for our Neiman Marcus and Bergdorf Goodman brands.

Selling, general and administrative expenses (excluding depreciation). SG&A expenses as a percentage of revenues increased to 22.8% of revenues in fiscal year 2014 compared to 22.5% of revenues in fiscal year 2013. The net increase in SG&A expenses by 0.3% of revenues in fiscal year 2014 was primarily due to:

•: higher marketing and selling costs of approximately 0.3% of revenues incurred primarily in support of the growth of our online operations; and
•: higher current and long-term incentive compensation requirements of approximately 0.2% of revenues; partially offset by

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•: favorable payroll and other costs of approximately 0.2% of revenues primarily due to the leveraging of these expenses on higher revenues.

Income from credit card program. Income from our credit card program was $55.3 million, or 1.1% of revenues, in fiscal year 2014 compared to $53.4 million, or 1.1% of revenues, in fiscal year 2013.

Depreciation and amortization expenses. Depreciation expense was $147.6 million, or 3.0% of revenues, in fiscal year 2014 compared to $141.5 million, or 3.0% of revenues, in fiscal year 2013. Amortization of intangible assets (primarily customer lists and favorable lease commitments) aggregated $160.3 million, or 3.3% of revenues, in fiscal year 2014 compared to $47.4 million, or 1.0% of revenues, in fiscal year 2013. The increases in depreciation and amortization expenses by 2.3% of revenues in fiscal year 2014 were due to higher asset values attributable to fair value adjustments to our assets recorded in connection with the purchase price allocation to reflect the Acquisition.

Other expenses. Other expenses in fiscal year 2014 aggregated $196.0 million, or 4.0% of revenues, compared to $23.1 million, or 0.5% of revenues, in fiscal year 2013. The increase in other expenses in fiscal year 2014 was primarily due to $162.7 million in transaction costs related to the Acquisition. In addition, we incurred approximately $12.6 million of expenses in fiscal year 2014 for expenses related to the investigation of the Cyber-Attack, including legal fees, investigative fees, costs of communications with customers and credit monitoring services provided to customers. We expect to incur additional costs to investigate and remediate the Cyber-Attack in the foreseeable future. Such costs are not currently estimable but could be material to our future operating results.

Operating earnings. We generated operating earnings of $41.0 million, or 0.8% of revenues, in fiscal year 2014 compared to operating earnings of $446.4 million, or 9.6% of revenues, in fiscal year 2013. Costs and expenses related to the Acquisition aggregated $292.4 million in fiscal year 2014.

Interest expense. Net interest expense was $270.1 million, or 5.6% of revenues, in fiscal year 2014 and $169.0 million, or 3.6% of revenues, for the prior fiscal year, reflecting the higher level of indebtedness incurred in connection with the Acquisition. The significant components of interest expense are as follows:

	Fiscal year ended

(in millions)	August 2, 2014			August 3, 2013
	(Combined)			(Predecessor)
Asset-Based Revolving Credit Facility	$	0.4		$	—
Senior Secured Term Loan Facility		106.5			—
Cash Pay Notes		60.3			—
PIK Toggle Notes		41.2			—
2028 Debentures		8.9			9.0
Former Asset-Based Revolving Credit Facility		0.5			1.5
Former Senior Secured Term Loan Facility		22.5			108.5
Senior Subordinated Notes		—			19.0
Amortization of debt issue costs		19.6			8.4
Other, net		3.0			7.2
Capitalized interest		(0.8	)		(0.2	)

	$	262.2		$	153.4
Loss on debt extinguishment		7.9			15.6

Interest expense, net	$	270.1		$	169.0

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In connection with the Refinancing Amendment (as defined below) with respect to the Senior Secured Term Loan Facility in fiscal year 2014, we incurred a loss on debt extinguishment of $7.9 million, which primarily consisted of the write-off of debt issuance costs incurred in connection with the initial issuance of the facility allocable to lenders that no longer participate in the facility subsequent to the refinancing.

In connection with the repayment of the Senior Subordinated Notes in fiscal year 2013, we incurred a loss on debt extinguishment of $15.6 million, which included (i) costs of $10.7 million related to the tender for and redemption of the Senior Subordinated Notes and (ii) the write-off of $4.9 million of debt issuance costs related to the initial issuance of the Senior Subordinated Notes.

Income tax expense. Our effective income tax rate for fiscal year 2014 was 35.8% compared to 41.0% for fiscal year 2013. Our effective income tax rates exceeded the federal statutory rate primarily due to state income taxes and the non-deductible portion of transaction costs incurred in connection with the Acquisition in fiscal year 2014.

We file income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. During the second quarter of fiscal year 2013, the Internal Revenue Service (IRS) began its audit of our fiscal year 2010 and 2011 federal income tax returns and closed its audit of our fiscal year 2008 and 2009 income tax returns. During the second quarter of fiscal year 2014, the IRS began its audit of our fiscal year 2012 federal income tax return. With respect to state and local jurisdictions, with limited exceptions, we are no longer subject to income tax audits for fiscal years before 2009. We believe our recorded tax liabilities as of August 2, 2014 are sufficient to cover any potential assessments to be made by the IRS or other taxing authorities upon the completion of their examinations and we will continue to review our recorded tax liabilities for potential audit assessments based upon subsequent events, new information and future circumstances. We believe it is reasonably possible that additional adjustments in the amounts of our unrecognized tax benefits could occur within the next twelve months as a result of settlements with tax authorities or expiration of statutes of limitation. At this time, we do not believe such adjustments will have a material impact on our Consolidated Financial Statements.

Results of Operations for the Fiscal Year Ended August 3, 2013 (Predecessor) Compared to the Fiscal Year Ended July 28, 2012 (Predecessor)

Revenues. Our revenues for fiscal year 2013 of $4,648.2 million increased by $302.8 million, or 7.0%, from $4,345.4 million in fiscal year 2012. Revenues generated by our online operations aggregated $1,031.9 million, representing a comparable increase of 15.8% from fiscal year 2012. New stores generated revenues of $41.2 million for the fifty-two weeks ended July 27, 2013 while revenues for the 53^rd week were $61.9 million.

Comparable revenues for the fifty-two weeks ended July 27, 2013 were $4,545.1 million compared to $4,331.8 million in fiscal year 2012, representing an increase of 4.9%. Changes in comparable revenues by quarter were:



First fiscal quarter	5.4	%	8.0	%
Second fiscal quarter	5.3		9.0
Third fiscal quarter	3.6		6.7
Fourth fiscal quarter	5.4		7.9
Total fiscal year	4.9		7.9

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Cost of goods sold including buying and occupancy costs (excluding depreciation). COGS for fiscal year 2013 was 64.4% of revenues compared to 64.3% of revenues for fiscal year 2012. The increase in COGS of 0.1% of revenues in fiscal year 2013 was primarily due to:

•: decreased product margins of approximately 0.1% of revenues due to higher promotional costs and markdowns as a result of lower than expected customer demand; and
•: higher delivery and processing net costs of approximately 0.1% of revenues as a result of lower revenues collected from our customers; partially offset by
•: the leveraging of buying and occupancy costs on higher revenues by 0.1% of revenues; and
•: the improvement in product margins related to the impact of the 53^rd week revenues, comprised primarily of full-price sales, of approximately 0.1% of revenues.

Selling, general and administrative expenses (excluding depreciation). SG&A expenses as a percentage of revenues decreased to 22.5% of revenues in fiscal year 2013 compared to 23.2% of revenues in fiscal year 2012. The decrease in SG&A expenses by 0.7% of revenues in fiscal year 2013 was primarily due to:

•: favorable payroll and other costs of approximately 0.4% of revenues primarily due to the leveraging of these expenses on higher revenues;
•: lower current incentive compensation costs of approximately 0.3% of revenues; and
•: adjustments of long-term incentive compensation costs of approximately 0.2% of revenues; partially offset by
•: higher planned selling and online marketing costs of approximately 0.2% of revenues incurred in connection with the continuing expansion of our e-commerce and omni-channel capabilities.

Income from credit card program. Income from our credit card program was $53.4 million, or 1.1% of revenues, in fiscal year 2013 compared to $51.6 million, or 1.2% of revenues, in fiscal year 2012.

Depreciation and amortization expenses. Depreciation expense was $141.5 million, or 3.0% of revenues, in fiscal year 2013 compared to $130.1 million, or 3.0% of revenues, in fiscal year 2012.

Amortization of intangible assets (primarily customer lists and favorable lease commitments) aggregated $47.4 million, or 1.0% of revenues, in fiscal year 2013 compared to $50.1 million, or 1.1% of revenues, in fiscal year 2012. The decrease in amortization expense is primarily due to certain short-lived intangible assets becoming fully amortized.

Other expenses. Other expenses in fiscal year 2013 aggregated $23.1 million, or 0.5% of revenues, compared to $11.5 million, or 0.3% of revenues, in fiscal year 2012. The increase in other expenses in fiscal year 2013 was primarily due to $13.1 million of our equity in the losses of our prior investment in a foreign e-commerce retailer.

Operating earnings. Total operating earnings in fiscal year 2013 were $446.4 million, or 9.6% of revenues, compared to $403.6 million, or 9.3% of revenues, in fiscal year 2012.

Interest expense. Net interest expense was $169.0 million, or 3.6% of revenues, in fiscal year 2013 and $175.2 million, or 4.0% of revenues, for the prior fiscal year. Excluding the $15.6 million loss on debt extinguishment, net interest expense decreased by $21.9 million in fiscal year 2013 primarily

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attributable to the effects of the refinancing transactions executed in the second quarter of fiscal year 2013. The significant components of interest expense are as follows:

	Fiscal year ended

(in millions)	August 3, 2013			July 28, 2012
2028 Debentures	$	9.0		$	8.9
Former Asset-Based Revolving Credit Facility		1.5			1.1
Former Senior Secured Term Loan Facility		108.5			99.0
Senior Subordinated Notes		19.0			51.9
Amortization of debt issue costs		8.4			8.5
Other, net		7.2			7.0
Capitalized interest		(0.2	)		(1.1	)

	$	153.4		$	175.2
Loss on debt extinguishment		15.6			—

Interest expense, net	$	169.0		$	175.2

Income tax expense. Our effective income tax rate for fiscal year 2013 was 41.0% compared to 38.7% for fiscal year 2012. Our effective income tax rates exceeded the federal statutory rate primarily due to:

•: state income taxes; and
•: the lack of a U.S. tax benefit related to the losses from our prior investment in a foreign e-commerce retailer in fiscal year 2013.

Inflation and Deflation

We believe changes in revenues and net earnings that have resulted from inflation or deflation have not been material during the past three fiscal years. In recent years, we have experienced certain inflationary conditions in our cost base due primarily to changes in foreign currency exchange rates that have reduced the purchasing power of the U.S. dollar and, to a lesser extent, to increases in selling, general and administrative expenses, particularly with regard to employee benefits, and increases in fuel prices and costs impacted by increases in fuel prices, such as freight and transportation costs.

LIQUIDITY AND CAPITAL RESOURCES

Our liquidity requirements consist principally of:

•: the funding of our merchandise purchases;
•: operating expense requirements;
•: debt service requirements;
•: capital expenditures for expansion and growth strategies, including new store construction, store remodels and upgrades of our management information systems;
•: income tax payments; and
•: obligations related to our defined benefit pension plan (Pension Plan).

Our primary sources of short-term liquidity are comprised of cash on hand, availability under the Asset-Based Revolving Credit Facility and vendor payment terms. The amounts of cash on hand and borrowings under the Asset-Based Revolving Credit Facility are influenced by a number of factors, including revenues, working capital levels, vendor terms, the level of capital expenditures, cash

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requirements related to financing instruments and debt service obligations, Pension Plan funding obligations and tax payment obligations, among others.

Our working capital requirements fluctuate during the fiscal year, increasing substantially during the first and second quarters of each fiscal year as a result of higher seasonal levels of inventories. We have typically financed our cash requirements with available cash balances, cash flows from operations and, if necessary, with cash provided from borrowings under the Asset-Based Revolving Credit Facility. We had no outstanding borrowings under the Asset-Based Revolving Credit Facility as of May 2, 2015.

We believe that operating cash flows, cash balances, available vendor payment terms and amounts available pursuant to the Asset-Based Revolving Credit Facility will be sufficient to fund our cash requirements through the end of fiscal year 2015, including merchandise purchases, anticipated capital expenditure requirements, debt service requirements, income tax payments and obligations related to our Pension Plan.

Cash provided by our operating activities was $122.8 million in year-to-date fiscal 2015 compared to $101.2 million in year-to-date fiscal 2014. We held cash balances of $82.2 million at May 2, 2015 compared to $115.8 million at May 3, 2014. Cash and cash equivalents were $196.5 million at August 2, 2014 compared to $136.7 million at August 3, 2013, an increase of $59.8 million. Net cash provided by our operating activities was $295.7 million in fiscal year 2014 compared to $349.4 million in fiscal year 2013. The decrease in cash provided by our operating earnings from fiscal year 2013 to fiscal year 2014 is primarily attributable to costs incurred in connection with the Acquisition partially offset by higher levels of cash generated from operating activities. In connection with the Acquisition, we incurred cash payments of approximately $147.3 million to fund costs and expenses incurred as a result of the Acquisition.

Net cash used for investing activities was $364.7 million in year-to-date fiscal 2015 and $3,465.2 million in year-to-date fiscal 2014. In year-to-date fiscal 2015, net cash used for investing activities includes cash payments of $181.7 million incurred in connection with the MyTheresa acquisition. In year-to-date fiscal 2014, net cash used for investing activities consisted primarily of payments of $3,388.6 million made in connection with the Acquisition. Capital expenditures aggregated $183.0 million in year-to-date fiscal 2015 and $111.6 million in year-to-date fiscal 2014. Currently, we project gross capital expenditures for fiscal year 2015 to be approximately $270 to $285 million. Net of developer contributions, capital expenditures for fiscal year 2015 are projected to be approximately $240 to $255 million.

Net cash used for investing activities was $3,527.6 million in fiscal year 2014 compared to $156.5 million in fiscal year 2013. The increase in net cash used for investing activities was primarily due to the Acquisition. We incurred capital expenditures in both fiscal years 2014 and 2013 related to remodels of our Michigan Avenue and Oak Brook Neiman Marcus stores and information technology enhancements.

Net cash provided by financing activities was $127.7 million in year-to-date fiscal 2015 comprised primarily of net borrowings under the Asset-Based Revolving Credit Facility to fund the MyTheresa acquisition and seasonal working capital requirements. Net cash provided by financing activities was $3,343.2 million in year-to-date fiscal 2014 comprised of the proceeds from net increases in debt incurred in connection with the Acquisition and cash equity contributions received in connection with the Acquisition.

Net cash provided by financing activities was $3,291.7 million in fiscal year 2014 compared to net cash used of $105.4 million in fiscal year 2013. Proceeds from debt incurred in connection with the Acquisition, net of debt issuance costs, aggregated $4,437.6 million and cash equity contributions received in connection with the Acquisition aggregated $1,556.5 million. Also in connection with the Acquisition, we repaid outstanding borrowings under our Former Asset-Based Revolving Credit Facility

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and our Former Senior Secured Term Loan Facility. Net cash used for financing activities in fiscal year 2013 reflects the impact of the refinancing transactions executed during the second quarter of fiscal year 2013 related to our former credit facilities.

We have embarked on a significant capital investment program in our stores. We will remodel 23 of our 43 full-line stores, including Bergdorf Goodman in New York City and our Neiman Marcus stores in Beverly Hills, Boston, Houston and Palo Alto. In fiscal year 2016, the program also contemplates remodeling approximately 7% of our over 850 designer shops and increasing the number of designer shops by approximately 20%. The store remodeling program will modernize our stores and reallocate selling space to more productive merchandise categories. It will enhance the presentation of merchandise from select luxury designers through continued building of new designer shops within our stores and remodels of many existing designer shops. We believe these actions will strengthen our relationships with our designers, increase customer traffic and generate significant returns.

Subject to applicable restrictions in our credit agreements and indentures, we or our affiliates, at any time and from time to time, may purchase, redeem or otherwise retire our outstanding debt securities, including through open market or privately negotiated transactions with third parties or pursuant to one or more tender or exchange offers or otherwise, upon such terms and at such prices, as well as with such consideration, as we, or any of our affiliates, may determine.

Financing Structure as of May 2, 2015

Our major sources of funds are comprised of the $900.0 million Asset-Based Revolving Credit Facility, the $2,905.8 million Senior Secured Term Loan Facility, $960.0 million Cash Pay Notes, $600.0 million PIK Toggle Notes, $125.0 million 2028 Debentures (each as described in more detail below), vendor payment terms and operating leases.

Asset-Based Revolving Credit Facility. At May 2, 2015, the Asset-Based Revolving Credit Facility provided for a maximum committed borrowing capacity of $900.0 million. The Asset-Based Revolving Credit Facility matures on October 25, 2018. As of May 2, 2015, we had $150.0 million of borrowings outstanding under this facility, no outstanding letters of credit and $660.0 million of unused borrowing availability.

Availability under the Asset-Based Revolving Credit Facility is subject to a borrowing base. The Asset-Based Revolving Credit Facility includes borrowing capacity available for letters of credit (up to $150.0 million, with any such issuance of letters of credit reducing the amount available under the Asset-Based Revolving Credit Facility on a dollar-for-dollar basis) and for borrowings on same-day notice. The borrowing base is equal to at any time the sum of (a) 90% of the net orderly liquidation value of eligible inventory, net of certain reserves, plus (b) 90% of the amounts owed by credit card processors in respect of eligible credit card accounts constituting proceeds from the sale or disposition of inventory, less certain reserves, plus (c) 100% of segregated cash held in a restricted deposit account. To the extent that excess availability is not equal to or greater than the greater of (a) 10% of the lesser of (1) the aggregate revolving commitments and (2) the borrowing base and (b) $50.0 million, we will be required to maintain a fixed charge coverage ratio.

The weighted average interest rate on the outstanding borrowings pursuant to the Asset-Based Revolving Credit Facility was 1.78% at May 2, 2015.

See "Description of Certain Indebtedness" for a further description of the terms of the Asset-Based Revolving Credit Facility.

Senior Secured Term Loan Facility. At May 2, 2015, the outstanding balance under the Senior Secured Term Loan Facility was $2,905.8 million. The principal amount of the loans outstanding is due and payable in full on October 25, 2020.

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Depending on our senior secured first lien net leverage ratio (as defined in the credit agreement governing the Senior Secured Term Loan Facility), we could be required to prepay outstanding term loans from a certain portion of its annual excess cash flow (as defined in the credit agreement governing the Senior Secured Term Loan Facility). Required excess cash flow payments commence at 50% of its annual excess cash flow (which percentage will be reduced to (a) 25% if our senior secured first lien net leverage ratio (as defined in the credit agreement governing the Senior Secured Term Loan Facility) is equal to or less than 4.0 to 1.0 but greater than 3.5 to 1.0 and (b) 0% if our senior secured first lien net leverage ratio is equal to or less than 3.5 to 1.0). We also must offer to prepay outstanding term loans at 100% of the principal amount to be prepaid, plus accrued and unpaid interest, with the proceeds of certain asset sales and debt issuances, subject to certain exceptions and reinvestment rights.

The interest rate on the outstanding borrowings pursuant to the Senior Secured Term Loan Facility was 4.25% at May 2, 2015.

See "Description of Certain Indebtedness" for a further description of the terms of the Senior Secured Term Loan Facility.

Cash Pay Notes. We have outstanding $960.0 million aggregate principal amount of 8.00% Senior Cash Pay Notes due 2021. The Cash Pay Notes mature on October 15, 2021.

See "Description of Certain Indebtedness" for a further description of the terms of the Cash Pay Notes.

PIK Toggle Notes. We have outstanding $600.0 million aggregate principal amount of 8.75%/9.50% Senior PIK Toggle Notes due 2021. The PIK Toggle Notes mature on October 15, 2021.

See "Description of Certain Indebtedness" for a further description of the terms of the PIK Toggle Notes.

2028 Debentures. We have outstanding $125.0 million aggregate principal amount of 7.125% Senior Debentures due 2028. The 2028 Debentures mature on June 1, 2028.

See "Description of Certain Indebtedness" for a further description of the terms of the 2028 Debentures.

Interest rate caps. At May 2, 2015, we had outstanding floating rate debt obligations of $3,055.8 million. We have entered into interest rate cap agreements which cap LIBOR at 3.00% for an aggregate notional amount of $1,400.0 million from December 2014 through December 2016 to hedge the variability of our cash flows related to a portion of our floating rate indebtedness. In the event LIBOR is less than the capped rate, we will pay interest at the lower LIBOR rate. In the event LIBOR is higher than the capped rate, we will pay interest at the capped rate.

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Contractual Obligations and Commitments

The following table summarizes our estimated significant contractual cash obligations at August 2, 2014:

	Payments Due by Period

(in millions)	Total		Fiscal Year 2015		Fiscal Years 2016 - 2017		Fiscal Years 2018 - 2019		Fiscal Year 2020 and Beyond
Contractual obligations:
Senior Secured Term Loan Facility(1)	$	2,927.9	$	29.4	$	58.9	$	58.9	$	2,780.8
Cash Pay Notes		960.0		—		—		—		960.0
PIK Toggle Notes		600.0		—		—		—		600.0
2028 Debentures		125.0		—		—		—		125.0
Interest requirements(2)		2,021.0		262.2		550.1		618.4		590.3
Lease obligations		906.4		64.6		122.3		105.7		613.8
Minimum pension funding obligation(3)		171.2		—		13.7		48.1		109.4
Other long-term liabilities(4)		75.2		6.6		14.0		15.2		39.4
Inventory purchase and construction commitments(5)		1,550.7		1,431.8		118.9		—		—

	$	9,337.4	$	1,794.6	$	877.9	$	846.3	$	5,818.7

(1): The above table does not reflect voluntary prepayments or future excess cash flow prepayments, if any, that may be required under the Senior Secured Term Loan Facility.
(2): The cash obligations for interest requirements reflect (a) interest requirements on our fixed-rate debt obligations at their contractual rates, with interest paid entirely in cash with respect to the PIK Toggle Notes, and (b) interest requirements on floating rate debt obligations at rates in effect at August 2, 2014. Borrowings pursuant to the Senior Secured Term Loan Facility bear interest at floating rates, primarily based on LIBOR, but in no event less than a floor rate of 1.00%, plus applicable margins. As a consequence of the LIBOR floor rate, we estimate that a 1% increase in LIBOR would not significantly impact our annual interest requirements during fiscal year 2015.
(3): At August 2, 2014 (the most recent measurement date), our actuarially calculated projected benefit obligation for our Pension Plan was $592.9 million and the fair value of the assets was $403.0 million resulting in a net liability of $189.9 million, which is included in other long-term liabilities at August 2, 2014. Our policy is to fund our Pension Plan at or above the minimum amount required by law. We made no voluntary contributions to the Pension Plan in fiscal year 2014 and made voluntary contributions of $25.0 million in fiscal year 2013. As of August 2, 2014, we do not believe we will be required to make contributions to the Pension Plan for fiscal year 2015.
(4): Included in other long-term liabilities at August 2, 2014 are our liabilities for our SERP and Postretirement Plans aggregating $118.1 million. Our scheduled obligations with respect to our SERP Plan and Postretirement Plan liabilities consist of expected benefit payments through 2024, as currently estimated using information provided by our actuaries. Also included in other long-term liabilities at August 2, 2014 are our liabilities related to 1) uncertain tax positions (including related accruals for interest and penalties) of $7.6 million and 2) other obligations aggregating $31.8 million, primarily for employee benefits. Future cash obligations related to these liabilities are not currently estimable.
(5): Construction commitments relate primarily to obligations pursuant to contracts for the construction of new stores and the remodels of existing stores expected as of August 2, 2014. These amounts

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represent the gross construction costs and exclude developer contributions of approximately $97.5 million, which we expect to receive pursuant to the terms of the construction contracts.

In the normal course of our business, we issue purchase orders to vendors/suppliers for merchandise. Our purchase orders are not unconditional commitments but, rather represent executory contracts requiring performance by the vendors/suppliers, including the delivery of the merchandise prior to a specified cancellation date and the compliance with product specifications, quality standards and other requirements. In the event of the vendor's failure to meet the agreed upon terms and conditions, we may cancel the order.

The following table summarizes the expiration of our other significant commercial commitments outstanding at August 2, 2014:

	Amount of Commitment by Expiration Period

(in millions)	Total		Fiscal Year 2015		Fiscal Years 2016 - 2017		Fiscal Years 2018 - 2019		Fiscal Years 2020 and Beyond
Other commercial commitments:
Asset-Based Revolving Credit Facility(1)	$	800.0	$	—	$	—	$	800.0	$	—
Surety bonds		4.7		4.6		0.2		—		—

	$	804.7	$	4.6	$	0.2	$	800.0	$	—

(1): As of August 2, 2014, we had no borrowings outstanding under the Asset-Based Revolving Credit Facility, no outstanding letters of credit and $720.0 million of unused borrowing availability. Our working capital requirements are greatest in the first and second fiscal quarters as a result of higher seasonal requirements. See "Key Factors Affecting Our Results—Seasonality."

In addition to the items presented above, our other principal commercial commitments are comprised of common area maintenance costs, tax and insurance obligations and contingent rent payments.

Off-Balance Sheet Arrangements

We had no off-balance sheet arrangements, other than operating leases entered into in the normal course of business, during fiscal year 2014. See Note 15 of the Notes to Consolidated Financial Statements for more information about our operating leases.

CRITICAL ACCOUNTING POLICIES

Our accounting policies are more fully described in Note 1 of the Notes to Consolidated Financial Statements in this prospectus. As disclosed in Note 1 of the Notes to Consolidated Financial Statements, the preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions about future events. These estimates and assumptions affect the amounts of assets, liabilities, revenues and expenses and the disclosure of gain and loss contingencies at the date of our Consolidated Financial Statements appearing elsewhere in this prospectus. Our current estimates are subject to change if different assumptions as to the outcome of future events were made. We evaluate our estimates and assumptions on an ongoing basis and predicate those estimates and assumptions on historical experience and on various other factors that we believe are reasonable under the circumstances. We make adjustments to our estimates and assumptions when facts and circumstances dictate. Since future events and their effects cannot be determined with absolute

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certainty, actual results may differ from the estimates and assumptions used in preparing the accompanying Consolidated Financial Statements.

We believe the following critical accounting policies encompass the more significant judgments and estimates used in the preparation of our accompanying Consolidated Financial Statements.

Revenues. Revenues include sales of merchandise and services and delivery and processing revenues related to merchandise sold. Revenues are recognized at the later of the point of sale or the delivery of goods to the customer. Revenues associated with gift cards are recognized at the time of redemption by the customer. Revenues exclude sales taxes collected from our customers.

Delivery and processing revenues aggregated $38.0 million for the thirty-nine weeks ended August 2, 2014, $14.8 million for the thirteen weeks ended November 2, 2013, $75.1 million in fiscal year 2013 and $72.0 million in fiscal year 2012.

Revenues are reduced when customers return goods previously purchased. We maintain reserves for anticipated sales returns primarily based on our historical trends related to returns by our customers. Our reserves for anticipated sales returns aggregated $38.9 million at August 2, 2014 and $37.4 million at August 3, 2013. As the vast majority of merchandise returns are made in less than 30 days after the sales transaction, we believe the risk that differences between our estimated and actual returns is minimal and will not have a material impact on our Consolidated Financial Statements.

Between 2005 and 2014, we created and maintained e-commerce websites pursuant to contractual arrangements with certain designers. Pursuant to these arrangements, we purchased and maintained inventory from such designers that was showcased on their respective websites and bore all responsibilities related to the fulfillment of goods purchased on such websites. All of these contractual arrangements expired by the end of the first quarter of fiscal year 2015 and were not renewed. Revenues generated from the operation of the designer websites were $83.5 million in fiscal year 2014, $66.5 million in fiscal year 2013, $48.6 million in fiscal year 2012 and $34.9 million in fiscal year 2011.

Merchandise Inventories and Cost of Goods Sold. We utilize the retail inventory method of accounting. Under the retail inventory method, the valuation of inventories at cost and the resulting gross margins are determined by applying a calculated cost-to-retail ratio, for various groupings of similar items, to the retail value of our inventories. The cost of the inventory reflected on the Consolidated Balance Sheets is decreased by charges to COGS at average cost and the retail value of the inventory is lowered through the use of markdowns. Earnings are negatively impacted when merchandise is marked down. As we adjust the retail value of our inventories through the use of markdowns to reflect market conditions, our merchandise inventories are stated at the lower of cost or market.

The areas requiring significant management judgment related to the valuation of our inventories include (i) setting the original retail value for the merchandise held for sale, (ii) recognizing merchandise for which the customer's perception of value has declined and appropriately marking the retail value of the merchandise down to the perceived value and (iii) estimating the shrinkage that has occurred between physical inventory counts. These judgments and estimates, coupled with the averaging processes within the retail method can, under certain circumstances, produce varying financial results. Factors that can lead to different financial results include (i) determination of original retail values for merchandise held for sale, (ii) identification of declines in perceived value of inventories and processing the appropriate retail value markdowns and (iii) overly optimistic or conservative estimation of shrinkage. In prior years, we have not made material changes to our estimates of shrinkage or markdown requirements on inventories held as of the end of our fiscal years. We do not believe that changes in the assumptions and estimates, if any, used in the valuation of our inventories at August 2, 2014 will have a material effect on our future operating performance.

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Consistent with industry business practice, we receive allowances from certain of our vendors in support of the merchandise we purchase for resale. Certain allowances are received to reimburse us for markdowns taken or to support the gross margins that we earn in connection with the sales of the vendor's merchandise. These allowances result in an increase to gross margin when we earn the allowances and they are approved by the vendor. Other allowances we receive represent reductions to the amounts we pay to acquire the merchandise. These allowances reduce the cost of the acquired merchandise and are recognized at the time the goods are sold. We received vendor allowances of $93.5 million (including $5.0 million for the Predecessor period prior to the Acquisition) in fiscal year 2014, $90.2 million in fiscal year 2013 and $92.5 million in fiscal year 2012. The amounts of vendor allowances we receive fluctuate based on the level of markdowns taken and did not have a significant impact on the year-over-year change in gross margin during any of the periods presented.

Long-lived Assets. Property and equipment are stated at cost less accumulated depreciation. For financial reporting purposes, we compute depreciation principally using the straight-line method over the estimated useful lives of the assets. Buildings and improvements are depreciated over five to 30 years while fixtures and equipment are depreciated over three to 15 years. Leasehold improvements are amortized over the shorter of the asset life or the lease term (which may include renewal periods when exercise of the renewal option is at our discretion and exercise of the renewal option is considered reasonably assured). Costs incurred for the development of internal computer software are capitalized and amortized using the straight-line method over three to ten years.

We assess the recoverability of the carrying values of our store assets, consisting of property and equipment, customer lists and favorable lease commitments, annually and upon the occurrence of certain events. The recoverability assessment requires judgment and estimates of future store generated cash flows. The underlying estimates of cash flows include estimates for future revenues, gross margin rates and store expenses. To the extent our estimates for revenue growth and gross margin improvement are not realized, future annual assessments could result in impairment charges.

Indefinite-lived Intangible Assets and Goodwill. Indefinite-lived intangible assets, such as tradenames and goodwill, are not subject to amortization. Rather, we assess the recoverability of indefinite-lived intangible assets and goodwill in the fourth quarter of each fiscal year and upon the occurrence of certain events.

The recoverability assessment with respect to each of our indefinite-lived intangible assets requires us to estimate the fair value of the asset as of the assessment date. Such determination is made using discounted cash flow techniques. Significant inputs to the valuation model include:

•: future revenue, cash flow and/or profitability projections;
•: growth assumptions for future revenues as well as future gross margin rates, expense rates, capital expenditures and other estimates;
•: estimated market royalty rates that could be derived from the licensing of our tradenames to third parties to establish the cash flows accruing to the benefit of the Company as a result of our ownership of our tradenames; and
•: rates, based on our estimated weighted average cost of capital, used to discount the estimated cash flow projections to their present value (or estimated fair value).

If the recorded carrying value of the tradename exceeds its estimated fair value, an impairment charge is recorded to write the tradename down to its estimated fair value. We currently estimate that the fair value of our tradenames decreases by approximately $382 million for each 0.5% decrease in market royalty rates and by approximately $96 million for each 0.25% increase in the weighted average cost of capital.

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The assessment of the recoverability of the goodwill associated with our Neiman Marcus stores, Bergdorf Goodman stores, Last Call stores and online reporting units involves a two-step process. The first step requires the comparison of the estimated enterprise fair value of each of our reporting units to its recorded carrying value. We estimate the enterprise fair value based on discounted cash flow techniques. If the recorded carrying value of a reporting unit exceeds its estimated enterprise fair value in the first step, a second step is performed in which we allocate the enterprise fair value to the fair value of the reporting unit's net assets. The second step of the impairment testing process requires, among other things, the estimation of the fair values of substantially all of our tangible and intangible assets. Any enterprise fair value in excess of amounts allocated to such net assets represents the implied fair value of goodwill for that reporting unit. If the recorded goodwill balance for a reporting unit exceeds the implied fair value of goodwill, an impairment charge is recorded to write goodwill down to its fair value. We currently estimate that a 5% decrease in the estimated fair value of the net assets of each of our reporting units as compared to the values used in the preparation of these financial statements would decrease the excess of fair value over the carrying value by approximately $326 million. In addition, we currently estimate that the fair value of our goodwill decreases by approximately $276 million for each 0.25% increase in the discount rate used to estimate fair value.

The impairment testing process related to our indefinite-lived intangible assets is subject to inherent uncertainties and subjectivity. The use of different assumptions, estimates or judgments with respect to the estimation of the projected future cash flows and the determination of the discount rate used to reduce such projected future cash flows to their net present value could materially increase or decrease any related impairment charge. We believe our estimates are appropriate based upon current market conditions and the best information available at the assessment date. However, future impairment charges could be required if we do not achieve our current revenue and profitability projections or the weighted average cost of capital increases.

Leases. We lease certain retail stores and office facilities. Stores we own are often subject to ground leases. The terms of our real estate leases, including renewal options, range from two to 130 years. Most leases provide for monthly fixed minimum rentals or contingent rentals based upon sales in excess of stated amounts and normally require us to pay real estate taxes, insurance, common area maintenance costs and other occupancy costs. For leases that contain predetermined, fixed calculations of minimum rentals, we recognize rent expense on a straight-line basis over the lease term. We recognize contingent rent expenses when it is probable that the sales thresholds will be reached during the year.

Benefit Plans. We sponsor a defined benefit Pension Plan, an unfunded supplemental executive retirement plan (SERP Plan) which provides certain employees additional pension benefits and a postretirement plan providing eligible employees limited postretirement health care benefits (Postretirement Plan). In calculating our obligations and related expense, we make various assumptions and estimates, after consulting with outside actuaries and advisors. The annual determination of expense involves calculating the estimated total benefits ultimately payable to plan participants. We use the traditional unit credit method in recognizing pension liabilities. The Pension Plan, SERP Plan and Postretirement Plan are valued annually as of the end of each fiscal year. As of the third quarter of fiscal year 2010, benefits offered to all employees under our Pension Plan and SERP Plan were frozen.

Significant assumptions related to the calculation of our obligations include the discount rates used to calculate the present value of benefit obligations to be paid in the future, the expected long-term rate of return on assets held by our Pension Plan and the health care cost trend rate for the Postretirement Plan. We review these assumptions annually based upon currently available information, including information provided by our actuaries.

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Significant assumptions utilized in the calculation of our projected benefit obligations as of August 2, 2014 and future expense requirements for our Pension Plan, SERP Plan and Postretirement Plan, and sensitivity analysis related to changes in these assumptions, are as follows:

							Using Sensitivity Rate

	Actual Rate			Sensitivity Rate Increase/(Decrease)			(Decrease)/ Increase in Liability (in millions)			Increase in Expense (in millions)
Pension Plan:
Discount rate		4.35	%		0.25	%	$	(20.3	)	$	0.5
Expected long-term rate of return on plan assets		6.50	%		(0.50	)%		N/A		$	1.9
SERP Plan:
Discount rate		4.20	%		0.25	%	$	(3.2	)	$	0.1
Postretirement Plan:
Discount rate		4.25	%		0.25	%	$	(0.3	)	$	—
Ultimate health care cost trend rate		5.00	%		1.00	%	$	1.4		$	0.1

Stock Compensation. At the date of grant, the stock option exercise price equals or exceeds the fair market value of the Company's common stock. Because we are privately held and there is no public market for its common stock, the fair market value of our common stock is determined by our Compensation Committee at the time option grants are awarded. In determining the fair market value of our common stock, the Compensation Committee considers such factors as any recent transactions involving the Company's common stock, the Company's actual and projected financial results, the principal amount of the Company's indebtedness, valuations of the Company performed by third parties and other factors it believes are material to the valuation process.

Recent Accounting Pronouncements

In May 2014, the FASB issued guidance to clarify the principles for recognizing revenue and to develop a common revenue standard for GAAP and International Financial Reporting Standards. The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes the most recent revenue recognition guidance. This new guidance is currently anticipated to be effective for us no earlier than the first quarter of fiscal year 2019 using one of two retrospective application methods. We are currently evaluating which application method to adopt and the impact of adopting this new accounting guidance on our Consolidated Financial Statements.

We do not expect that any other recently issued accounting pronouncements will have a material impact on our Condensed Consolidated Financial Statements.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risks, which include significant deterioration of the U.S. and foreign markets, changes in U.S. interest rates, foreign currency exchange rates, including the devaluation of the U.S. dollar, and the effects of economic uncertainty that may affect the prices we pay our vendors in the foreign countries in which we do business. We do not engage in financial transactions for trading or speculative purposes.

Interest Rate Risk

The market risk inherent in our financial instruments represents the potential loss arising from adverse changes in interest rates. We do not enter into derivative financial instruments for trading purposes. We seek to manage exposure to adverse interest rate changes through our normal operating

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and financing activities. We are exposed to interest rate risk through our borrowing activities, which are described in Note 7 of the Notes to Consolidated Financial Statements.

At May 2, 2015, we had outstanding floating rate debt obligations of $3,055.8 million consisting of outstanding borrowings under our Senior Secured Term Loan Facility. Borrowings pursuant to the Senior Secured Term Loan Facility bear interest at floating rates, primarily based on LIBOR, but in no event less than a floor rate of 1.00%, plus applicable margins. The interest rate on the outstanding borrowings pursuant to the Senior Secured Term Loan Facility was 4.25% at May 2, 2015. A further description of the terms of the Senior Secured Term Loan Facility is set forth in Note 7 of the Notes to Consolidated Financial Statements.

We have entered into interest rate cap agreements which cap LIBOR at 2.50% for an aggregate notional amount of $1,000.0 million from December 2012 through December 2014 and at 3.00% for an aggregate notional amount of $1,400.0 million from December 2014 through December 2016 to hedge the variability of our cash flows related to a portion of our floating rate indebtedness. If LIBOR is less than the capped rate, we will pay interest at the lower LIBOR rate. If LIBOR is higher than the capped rate, we will pay interest at the capped rate. As of May 2, 2015, three-month LIBOR was 0.28%. As a consequence of the LIBOR floor rate described above, we estimate that a 1% increase in LIBOR would not significantly impact our annual interest requirements during fiscal year 2015.

The effects of changes in the U.S. equity and bond markets serve to increase or decrease the value of pension plan assets, resulting in increased or decreased cash funding by us. We seek to manage exposure to adverse equity and bond returns by maintaining diversified investment portfolios and utilizing professional investment managers.

Foreign Currency Risk

We purchase a substantial portion of our inventory from foreign suppliers whose costs are affected by the fluctuation of their local currency against the U.S. dollar or who price their merchandise in currencies other than the U.S. dollar. While fluctuations in the Euro-U.S. dollar exchange rate can affect us most significantly, we source merchandise from numerous countries and thus are affected by changes in numerous other currencies and, generally, by fluctuations in the value of the U.S. dollar relative to such currencies. Changes in the value of the U.S. dollar relative to foreign currencies may impact the retail prices of merchandise offered for sale and/or our cost of goods sold. Weakening foreign currency exchange rates may create disincentives to, or changes in the pattern, practice or frequency of, travel to and spending by foreign tourists in the regions in which we operate our retail stores. Also, a strengthening U.S. dollar may impact U.S. consumers' willingness or ability to travel abroad and purchase merchandise we offer for sale at lower prices from foreign retailers. Any of these effects could cause our revenues or product margins to decrease. However, we do not believe that fluctuations in the value of the U.S. dollar or other currencies have had a significant impact on our results of operations for the periods presented in our Consolidated Financial Statements or our Condensed Consolidated Financial Statements.

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BUSINESS

Our Company

As a leader in omni-channel retailing, we provide our customers a deep assortment of luxury merchandise and a consistent, seamless shopping experience whether our customers shop in our stores, on our websites or via e-mail, text or phone communications with our sales associates. Our comprehensive digital platform integrates and personalizes the online and in-store experience. We empower our sales associates with mobile devices and proprietary technology to improve their connection with our customers, and we utilize advanced analytics to personalize merchandise presentations to our customers when they shop online. We believe that over 75% of the total luxury spending of our customers is digitally influenced, which refers to purchases researched or transacted online.

We engage our customers primarily through three brands:

Based only on sales transacted in store, the combined productivity of our 43 full-line stores was $589 per square foot for the twelve-month period ended May 2, 2015.

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Our Industry

Our Customers

Our customers are educated, affluent and digitally connected. The average age of our customers is 51 and approximately 48% of our customers are 50 or younger. Approximately 79% of our customers are female, approximately 38% of our customers have a median household income of over $200,000, and over 40% of our customers have a total household net worth greater than $1 million. Our customers are active on social media, and we engage them through an active presence on Facebook, Twitter, Instagram and Pinterest, our primary social media platforms.

Our InCircle loyalty program is designed to cultivate long-term relationships with our customers. This program includes marketing features, such as private in-store events, as well as the ability to accumulate points for qualifying purchases. Approximately 40% of our total revenues in fiscal year 2014 were generated by our InCircle loyalty program members who achieved reward status. These customers spend approximately 11 times more annually with us than our other customers.

Our Competitive Strengths

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a desirable partner to luxury designers and allows us to acquire a superior allocation of narrowly distributed merchandise.

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fashion trends both by us and directly by designers and are empowered to act as personal shoppers and style advisors to our affluent customers. We have invested in technology to enhance our sales associates' ability to develop and maintain close relationships with our customers. Sales associates who have been with us for longer than one year have an average tenure of approximately nine years and had a turnover rate in fiscal year 2014 of 12%. These tenured associates are highly productive, with more than 40% of them each generating over $750,000 of revenues in fiscal year 2014.

Our Growth Strategy

We expect to continue driving our sales and profit growth by executing the following strategies:

•: Personalize the shopping experience: We are able to associate approximately 90% of our total revenues with specific customers. Additionally, we are able to associate substantially all browsing behavior on our digital platforms with unique individuals. By aggregating this data and employing advanced analytics, we are able to generate a single view of these customers' engagement with our brands. We utilize this data to enhance the interactions with our customers when they are in our stores and personalize the presentation of merchandise to our customers when they shop online. We employ the same data to increase the efficiency and effectiveness of both our traditional and digital marketing. We intend to continue to invest in advanced algorithms and methodologies to improve the relevance of personalized merchandise suggestions and the effectiveness of our marketing spend.
•: Productivity: Our store management tracks a range of sales productivity metrics on a real-time basis, including comparisons of sales performance by category, department and brand, and comparisons of sales performance to targets. We also capture metrics to measure our sales associates' usage of our proprietary mobile technology, including the nature and frequency of communication with our customers. We believe that as our sales associates continue to optimize their utilization of the full and evolving functionality of our mobile technology, we will improve sales productivity and sales associate efficiency and increase the number and quality of customer-facing interactions.
•: NMG One: We are in the process of implementing a new Oracle-based merchandising system, which we call NMG One, that will enable us to purchase, share, manage and sell our inventory across channels more efficiently. We expect the implementation of NMG One to be substantially completed during calendar year 2016, and expect to see significant margin and cash flow benefits in the future.

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•: Mobile: We are investing significant resources to enable our customers to browse and shop online and in store on mobile devices. We continually enhance the functionality and user interface of our platforms to incorporate the latest available technology. We expect that improvements in our mobile technology will enable us to generate further insights into our customers and drive greater engagement and loyalty.

Our merchandising strategies include:

•: Create unique and carefully curated assortments by working with leading designers. Areas of focus include achieving a greater level of exclusive merchandise, negotiating exclusivity for merchandise categories and geographies, collaborating with designers on brand extensions into new merchandise categories and increasing our allocation of the best-trending items.
•: Provide insight and guidance to designers regarding merchandise attributes (including pricing, fabrics and materials, silhouette, fit, classification, color direction and other trends), marketing and operations, thereby helping them optimize their product offering and elevate their brand profiles.
•: Partner with designers to create new in-store shops and remodel existing ones.
•: Identify new luxury fashion designers and provide them the opportunity to rapidly grow their businesses and increase their exposure through our omni-channel retail platform.
•: Leverage our omni-channel capabilities by optimizing the selection of merchandise categories and items that are presented in store, online or both.

These merchandising strategies are designed to bring uniqueness to our assortment and newness to our stores and to ensure we reinforce our merchandising leadership to the luxury fashion consumer.

We also intend to utilize the MyTheresa platform to grow Neiman Marcus and Bergdorf Goodman revenues internationally. MyTheresa's fulfillment capabilities provide us with the infrastructure to source and distribute Neiman Marcus Group merchandise directly in Europe, which gives us a distinct logistical advantage over many of our U.S.-based competitors.

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•: Roosevelt Field: We expect to open an approximately 100,000 square-foot full-line Neiman Marcus store in Long Island, New York in the third quarter of fiscal year 2016. The store will be located in the Roosevelt Field Mall in Garden City, which is currently undergoing a $200 million redevelopment program.
•: Hudson Yards: We have signed a lease to open a flagship full-line Neiman Marcus store on Manhattan's flourishing west side at Hudson Yards, a new $20 billion, 28-acre mixed-use development project. The approximately 250,000 square-foot, multi-level store, which we currently expect to open in fiscal year 2019, marks the first full-line Neiman Marcus store in New York City and will anchor the one-million-square-foot Shops at Hudson Yards. This new store will offer to New York's residents and visitors Neiman Marcus's signature mix of the world's most exclusive luxury brands and superior customer service.

Expand Our Operating Margins. We have embarked on a comprehensive cost re-engineering project called "Organizing for Growth" to optimize our resources and organizational processes. We are addressing over $1 billion of annual costs across multiple functional areas including stores, marketing and distribution, and we expect this project will result in efficiencies and cost savings, improving operating margins.

Brands

We operate three primary luxury brands—Neiman Marcus, Bergdorf Goodman and MyTheresa—which offer the highest level of personalized, concierge-style service to our customers and a distinctive selection of women's and men's apparel, handbags, shoes, cosmetics and precious and designer jewelry from premier luxury and fashion designers to our loyal and affluent customers "anytime, anywhere, any device." We also operate Last Call, an off-price fashion brand catering to aspirational, price-sensitive yet fashion-minded customers, CUSP, a fashion brand catering to younger customers focused on contemporary styles, and Horchow, a luxury home furnishings and accessories brand.

Our luxury brands comprise a unique, omni-channel retailing model that enables us to leverage our relationships with luxury and fashion designers within each brand to optimize our merchandise

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allocations and assortments, and to expand our customer base and brand awareness by exposing customers of each brand to our other brands through our online platforms and InCircle multi-brand loyalty program. Our Last Call brand sources end-of-season and post-season clearance merchandise from our Neiman Marcus and Bergdorf Goodman brands and purchases other off-price merchandise directly from designers for resale, which enables us to effectively manage our inventory while expanding our brand awareness to aspirational, price-sensitive customers. Our Horchow brand also enhances our brand awareness to purchasers of luxury home furnishings and accessories who may not otherwise be customers of our luxury fashion retail brands, and our CUSP brand enables us to expand our customer base by providing us exposure to younger customers.

Neiman Marcus. Neiman Marcus offers distinctive luxury merchandise, including women's couture and designer apparel, contemporary sportswear, handbags, shoes, cosmetics, men's clothing and accessories, precious and designer jewelry, decorative home accessories, fine china, crystal and silver, children's apparel and gift items. Our customers access our Neiman Marcus brand and purchase merchandise through our 41 full-line Neiman Marcus stores located in 18 states and the District of Columbia, our print catalogs, our website, neimanmarcus.com, and our mobile app.

Our Neiman Marcus stores are located in marquee retail locations in major metropolitan markets across the United States, and are organized as a collection of designer boutiques for established and emerging luxury and fashion designers, each of which is carefully curated by our Neiman Marcus merchandising team. Our Neiman Marcus stores are designed to provide a modern, luxurious ambiance by blending art, architecture and technology. We deliver exceptional customer service and a premier shopping experience through our knowledgeable, professional and well-trained sales associates, our loyalty program and our premier in-store dining experiences.

Our Neiman Marcus website and mobile app are organized by both product category and brand, and are designed to provide a boutique-like experience for our customers "anytime, anywhere, any device," by offering a wide selection of merchandise and around-the-clock customer assistance. Our online platforms are highly personalized: our "My NM" web pages adjust to our customers' preferences based on their prior visits and purchases, allowing customers to select their favorite items, see items new to the site since their last visit and request to be informed of new merchandise or events at their local Neiman Marcus store; our "Snap. Find. Shop." feature allows customers to search our inventory; and our "Product Configurator" allows customers to customize select items, including shoes and boots, with special colors, fabrics and monograms.

Bergdorf Goodman. Bergdorf Goodman is a premier retailer in New York City known for its high-luxury merchandise, which includes women's couture and designer apparel, contemporary sportswear, handbags, shoes, cosmetics, men's clothing and accessories, precious and designer jewelry, decorative home accessories, fine china, crystal and silver, children's apparel and gift items. Our customers access our Bergdorf Goodman brand and purchase merchandise through our two Bergdorf Goodman stores, including a dedicated men's store, our print catalogs and our Bergdorf Goodman online platform, bergdorfgoodman.com.

Our two Bergdorf Goodman stores are landmark locations on iconic Fifth Avenue in New York City. The elegant, meticulously designed and decorated and visually stunning stores are tourist attractions and have been featured in numerous films and television shows. Like Neiman Marcus, they feature a collection of designer boutiques for established and emerging luxury and fashion designers, each of which is carefully curated by our Bergdorf Goodman merchandising team to include our narrowly distributed, highly differentiated and distinctive luxury merchandise. Bergdorf Goodman stores feature the same level of dedication to exceptional customer service as Neiman Marcus, and often showcase innovative new customer service and marketing strategies, including in-store electronic device charging kiosks, promotional local same-day delivery and online social initiatives.

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Our Bergdorf Goodman online platform, like Neiman Marcus, is organized by both product categories and brand, and is designed to provide a boutique-like experience for our customers by offering personalized presentation of a wide selection of merchandise and around-the-clock customer assistance.

MyTheresa. In October 2014, we acquired MyTheresa, a global omni-channel luxury retailer based in Munich, Germany. MyTheresa offers an assortment of merchandise focused on luxury, first-season fashion curated by the MyTheresa merchandising team. Customers access our MyTheresa brand through mytheresa.com, our mobile app and the THERESA flagship store in Munich, Germany. Our MyTheresa online platform offers a unique combination of editorial content on the latest trends and a broad offering of merchandise. The MyTheresa platform provides us with the infrastructure to source and distribute Neiman Marcus Group merchandise directly in Europe, which gives us a distinct logistical advantage over many of our U.S.-based competitors.

Last Call. Last Call is an off-price fashion goods retailer. Our customers purchase merchandise through our 43 Last Call stores and our website, lastcall.com. Merchandise offered under our Last Call brand includes, among other things, end-of-season and post-season clearance goods sourced directly from our Neiman Marcus and Bergdorf Goodman brands or other off-price merchandise purchased from designers for resale.

Horchow and CUSP. We also operate the Horchow brand, which offers luxury home furnishings and accessories primarily through horchow.com and print catalogs, and the CUSP brand, which offers contemporary fashion merchandise targeted to younger customers through CUSP.com and five stores.

Customer Service and Marketing

We have a longstanding heritage of providing the highest level of personalized, concierge-style service to our customers through our experienced team of sales associates. We believe our superior customer service enables us to cultivate long term-customer relationships and build strong loyalty to our brands. We are committed to providing our customers with a premier shopping experience at all of our brands, whether in-store or through our online platforms, through the following elements of our comprehensive customer service model:

•: omni-channel marketing programs designed to promote customer awareness of our offerings of the latest fashion trends;
•: our InCircle loyalty program designed to cultivate long-term relationships with our customers;
•: our proprietary credit card program facilitating the extension of credit to our customers;
•: knowledgeable, professional and well-trained sales associates; and
•: customer-friendly websites.

We believe we offer our customers fair and liberal return policies consistent with the practices of other luxury and specialty retailers and generally more favorable than designer-owned boutiques and websites. We believe these policies help to cultivate long-term relationships with our customers.

Marketing Programs. We conduct a wide variety of omni-channel marketing programs that allow us to engage with our customers in multiple ways. We use our marketing programs to develop and maintain relationships with customers, communicate fashion trends and information and generate excitement about our designer brands. The programs include in-store and online events, social promotions and targeted communications leveraging digital and traditional media.

We maintain an active calendar of events to promote our marketing programs. The events, many of which are connected to our InCircle loyalty program, include integrated in-store and online

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promotions of the merchandise of selected designers or merchandise categories. We also hold seasonal in-store and online trunk shows by leading designers featuring the newest fashions from the designer and participate in charitable functions and partnerships in each of our markets. Trunk shows and in-store promotions at our Neiman Marcus and Bergdorf Goodman stores feature a variety of national and international designers such as Chanel, Prada, Tom Ford, Lanvin, Oscar de la Renta and Christian Louboutin.

We maintain social media platforms for Neiman Marcus, Bergdorf Goodman and MyTheresa on blogs, Twitter feeds, Instagram accounts, Pinterest boards and Facebook pages. Social content includes insider fashion news, designer profiles, product promotion, customer service and event support. Posts and replies to customers are updated multiple times per day. Each platform is designed to reinforce our position as a fashion leader as well as to highlight the expertise and insider knowledge of our fashion directors and merchants.

Through our print media programs, we mail various publications to our customers communicating upcoming in-store events, new merchandise offerings and fashion trends. In connection with these programs, Neiman Marcus produces The Book approximately eight times each year. The Book is a high-quality catalog featuring the latest fashion trends that is mailed on a targeted basis to our customers, with a printing in fiscal year 2014 of approximately 1.8 million copies. Our other print publications include the Bergdorf Goodman Magazine, the MyTheresa magazine and specific designer mailers.

In addition to print publications, we leverage our websites and online advertising through banner ads and paid searches to, among other things, communicate and connect with customers seeking fashion information and products online. We believe that our online and print catalog operations complement our full-line retail stores and enable our customers to choose the channel that best fits their needs at any given time.

InCircle Loyalty Program. Our InCircle loyalty program is designed to cultivate long-term relationships with our customers. Our loyalty program focuses on our most active customers, and includes marketing features such as private in-store events and the ability to accumulate points for qualifying purchases. Increased points are periodically offered in connection with promotional and other events. Upon attaining specified point levels, points are automatically redeemed for gift cards. Approximately 40% of our total revenues in fiscal year 2014 were generated by our InCircle loyalty program members who achieved reward status. These customers spend approximately 11 times more annually with us than our other customers.

Proprietary Credit Card Program. We maintain a proprietary credit card program through which credit is extended to customers and have a related marketing and servicing alliance with affiliates of Capital One. Historically, our customers holding a proprietary credit card, all of whom are members of our InCircle loyalty program, have tended to shop more frequently and have a higher level of spending than customers paying with cash or third-party credit cards. In fiscal years 2014 and 2013, approximately 40% of our revenues were transacted through our proprietary credit cards. We utilize data captured through our proprietary credit card program in connection with promotional events and customer relationship programs to target specific customers based upon their past spending patterns for certain brands, merchandise categories and store locations.

Pursuant to the Program Agreement, Capital One offers proprietary credit card accounts to our customers under both the Neiman Marcus and Bergdorf Goodman brand names. We receive payments from Capital One based on sales transacted on our proprietary credit cards. We may receive additional payments based on the profitability of the portfolio as determined under the Program Agreement depending on a number of factors, including credit losses. In addition, we receive payments from Capital One for marketing and servicing activities we provide to Capital One.

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In connection with the Program Agreement, we have changed and may continue to change the terms of credit offered to our customers. In addition, Capital One has discretion over certain policies and arrangements with credit card customers and may change these policies and arrangements in ways that affect our relationships with these customers. The Program Agreement terminates July 2020 (renewable thereafter for three-year terms), subject to early termination provisions.

Sales Associates. Our sales associates instill and reinforce a culture of relationship-based service valued by our customers. We compensate our sales associates primarily on a commission basis and provide them with training in the areas of customer service, selling skills and product knowledge. Our sales associates participate in active clienteling programs, utilizing both print and digital media, designed to initiate and maintain contact with our customers between store visits and to provide personalized updates on the latest merchandise offerings and fashion trends. We empower our sales associates to act as personal shoppers and, in many cases, as the personal style advisor to our customers. In our online operations, customers may interact with knowledgeable sales associates using online chat capabilities offered on our websites or by dialing a toll-free telephone number.

We have equipped our sales force with smartphones enabled with our proprietary mobile technology, which has enabled our sales associates to strengthen relationships with our customers in real time through text messages and e-mails. The mobile apps include our business dashboard, which shows our sales associates a customer's purchase history across channels, the customer's alteration details and other service details. The sales associate is also given product recommendations and reasons to contact customers for events or offers.

Our sales associates are experienced. Sales associates who have been with us for longer than one year have an average tenure of approximately nine years and had a turnover rate in fiscal year 2014 of 12%. These tenured associates are highly productive, with more than 40% of them each generating over $750,000 of revenues in fiscal year 2014.

Customer-Friendly Online Platforms. We believe that we offer a high level of service to customers shopping online through easy-to-use smartphone apps and websites, site speeds and functionality and many customer-friendly features such as personalized recommendations, runway videos of apparel, detailed product descriptions, sizing information, interviews with designers and multiple angle shots of merchandise. In addition, we place high importance on quick, accurate product delivery and offer customers a variety of options to take delivery of their purchases and make returns, including free shipping and returns, same-day delivery, buy online and pick up in store and buy online and pick up in department. We also offer customers an efficient and friendly call center.

Merchandise

We carry a broad selection of narrowly distributed, highly differentiated and distinctive luxury merchandise carefully curated by our highly skilled merchandising groups. We believe our merchandising experience and in-depth knowledge of our customers and the markets within which we operate allow us to select an appropriate merchandise assortment that is tailored to fully address our customers' lifestyle needs.

Our experienced merchandising personnel determine the merchandise assortment and quantities to be purchased for each of our brands and the allocation of merchandise to each store. As of August 1, 2015, we had approximately 450 merchandise buyers and merchandise planners.

Effective April 2014, we merged the merchant and planning organizations for Neiman Marcus stores and Neiman Marcus online into one team under our President, Chief Merchandising Officer. The new combined omni-channel merchandising team is now responsible for inventory procurement for stores and online. The integration of the merchandising responsibilities for our Neiman Marcus brand

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represents a significant enhancement of our omni-channel capabilities and elevates our ability to deliver a superior shopping experience to our customers by unifying inventory in stores and online.

Our percentages of revenues by major merchandise category for fiscal years 2014, 2013 and 2012 were as follows:

	Fiscal year ended August 2, 2014			Fiscal year ended August 3, 2013			Fiscal year ended July 28, 2012

	(Combined)			(Predecessor)			(Predecessor)
Women's Apparel		31	%		31	%		34	%
Women's Shoes, Handbags and Accessories		28			27			25
Men's Apparel and Shoes		12			12			12
Designer and Precious Jewelry		11			12			11
Cosmetics and Fragrances		11			11			11
Home Furnishings and Decor		5			5			6
Other		2			2			1

		100	%		100	%		100	%

Substantially all of our merchandise is delivered to us by our designers as finished goods and is manufactured in numerous locations, including Europe and the United States and, to a lesser extent, China, Mexico and South America.

Our major merchandise categories are as follows:

Women's Apparel. Women's apparel consists of dresses, eveningwear, suits, coats and sportswear separates—skirts, pants, blouses, jackets and sweaters. We work with women's apparel designers to present the merchandise and highlight the best of the designer's product. Our primary women's apparel designers include Chanel, Gucci, Prada, Giorgio Armani, Valentino, Akris and Brunello Cucinelli.

Women's Shoes, Handbags and Accessories. Women's accessories include belts, gloves, scarves, hats and sunglasses and complement our shoes and handbags assortments. Our primary designers in this category include Christian Louboutin, Chanel, Manolo Blahnik, Prada, Saint Laurent, Jimmy Choo and Tory Burch in ladies' shoes and Chanel, Prada, Gucci, Bottega Veneta, Balenciaga, Goyard, Louis Vuitton and Celine in handbags.

Men's Apparel and Shoes. Men's apparel and shoes include suits, dress shirts and ties, sport coats, jackets, trousers, casual wear and eveningwear as well as business and casual footwear. Our primary designers in this category include Ermenegildo Zegna, Brioni, Giorgio Armani, Tom Ford, Brunello Cucinelli and Burberry in men's clothing and sportswear and Ermenegildo Zegna, Brioni, Prada, Ferragamo, Gucci and Tom Ford in men's accessories and shoes.

Designer and Precious Jewelry. Our designer and precious jewelry offering includes women's necklaces, bracelets, rings, earrings and watches that are selected to complement our apparel merchandise offering. Our primary designers in this category include David Yurman, John Hardy and Ippolita in designer jewelry and Chanel and Van Cleef & Arpels in precious jewelry. We often sell precious jewelry that has been consigned to us from the designer.

Cosmetics and Fragrances. Cosmetics and fragrances include facial and skin cosmetics, skin therapy and lotions, soaps, fragrances, candles and beauty accessories. Our primary designers of cosmetics and beauty products include La Mer, Chanel, Sisley, Bobbi Brown, La Prairie, Estee Lauder, Laura Mercier and Tom Ford.

Home Furnishings and Decor. Home furnishings and decor include linens, tabletop, kitchen accessories, furniture, rugs, decorative items (frames, candlesticks, vases and sculptures) and collectibles. Merchandise for the home complements our apparel offering in terms of quality and

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design. Our primary designers in this category include Jay Strongwater, MacKenzie-Childs and Baccarat.

Luxury and Fashion Designer Relationships

Our merchandise assortment consists of a broad selection of narrowly distributed, highly differentiated and distinctive luxury merchandise purchased from both well-known luxury designers and new and emerging fashion designers. We communicate with our designers frequently, providing feedback on current demand for their products, suggesting changes to specific product categories or items and gaining insight into their future fashion direction. Certain designers sell their merchandise or certain of their design collections exclusively to us and other designers sell to us pursuant to their limited distribution policies. Our relationships and purchasing power with designers allow us to obtain a broad selection of quality merchandise. Our women's and men's apparel and fashion accessories merchandise categories are especially dependent upon our relationships with designers. We monitor and evaluate the sales and profitability performance of each designer and adjust our future purchasing decisions from time to time based upon the results of this analysis. We have no guaranteed supply arrangements with our principal merchandising sources. In addition, our designer base is diverse, with only two designers representing more than 5% of the cost of our total purchases in fiscal year 2014. These designers represented 7.0% and 5.1% of our total purchases in fiscal year 2014. The breadth of our sourcing helps mitigate risks associated with a single brand or designer.

Consistent with industry business practice, we receive allowances from certain of our designers in support of the merchandise we purchase for resale. We also receive advertising allowances from certain of our designers, substantially all of which represent reimbursements of direct, specified and incremental costs we incur to promote the designers' merchandise. In addition, we receive allowances from certain merchandise designers in conjunction with compensation allowances for employees who sell the designers' merchandise. For more information related to allowances received from designers, see Note 1 of the Notes to Consolidated Financial Statements.

To expand our product assortment, we offer certain merchandise, primarily precious jewelry, that has been consigned to us from the designer. As of May 2, 2015 and May 3, 2014, we held consigned inventories with a cost basis of approximately $452.1 million and $407.8 million, respectively. Consigned inventories are not reflected in our Consolidated Balance Sheets as we do not take title to consigned merchandise.

Inventory Management

We manage our inventory on an omni-channel basis, and our processes and facilities are designed to optimize merchandise productivity. We are in the process of implementing a new Oracle-based merchandising system, which we call NMG One, that will enhance our ability to purchase, share, manage and sell our inventory.

The majority of the merchandise we purchase is initially received at one of our centralized distribution facilities. We utilize distribution facilities in Longview, Texas, the Dallas-Fort Worth area, Pittston, Pennsylvania and Munich, Germany, and three regional service centers in the United States.

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Our distribution facilities are linked electronically to our various merchandising teams to facilitate the distribution of goods to our stores.

We utilize electronic data interchange technology with certain of our designers, which is designed to move merchandise onto the selling floor quickly and cost-effectively by allowing designers to deliver floor-ready merchandise to the distribution facilities. In addition, we utilize high-speed automated conveyor systems capable of scanning the bar-coded labels on incoming cartons of merchandise and directing the cartons to the proper processing areas. Many types of merchandise are processed in the receiving area and immediately "cross docked" to the shipping dock for delivery to the stores. Certain processing areas are staffed with personnel equipped with hand-held radio frequency terminals that can scan a designer's bar code and transmit the necessary information to a computer to record merchandise on hand. We utilize third-party carriers to distribute our merchandise to individual stores.

We primarily operate on a pre-distribution model through which we allocate merchandise on our initial purchase orders to each store. This merchandise is shipped from our designers to our distribution facilities for delivery to designated stores. We closely monitor the inventory levels and assortments in our retail stores to facilitate reorder and replenishment decisions, satisfy customer demand and maximize sales.

We maintain inventories at the Longview and Pittston distribution facilities. We utilize a "locker stock" inventory management program to maintain a portion of our most in-demand and high fashion merchandise at these distribution facilities. For products stored in locker stock, we can ship merchandise to the stores that demonstrate the highest customer demand or directly to our customers, from our stores or our e-commerce platform. This program helps us to restock inventory at individual stores more efficiently, to maximize the opportunity for full-price selling and to minimize the potential risks related to excess inventories.

The two distribution centers in the Dallas-Fort Worth area support our online operations in the United States, and our distribution center outside of Munich, Germany supports our MyTheresa operations. These distribution centers facilitate the receipt and storage of inventories from designers, fulfill customer orders on a timely and efficient basis and receive, research and resolve customer returns.

Capital Investments

We invest capital to support our long-term business goals and objectives with a goal of generating strong returns. We invest capital in the development and construction of new and existing stores, online platforms, distribution and support facilities and information technology. Since fiscal year 2010, we have made gross capital expenditures aggregating $809.2 million related primarily to: (i) the construction of a new store in Walnut Creek, California (opened in fiscal year 2012) and a distribution facility in Pittston, Pennsylvania; (ii) investments in our online platforms and technology and information systems; (iii) enhancements to our merchandising and store systems; and (iv) the remodel of our Bergdorf Goodman men's store on Fifth Avenue in New York City and Neiman Marcus stores in Bal Harbour, Florida, Chicago, Illinois, Oak Brook, Illinois and Beverly Hills, California.

Gross capital expenditures for fiscal year 2015 are expected to be approximately $270 to $285 million. Net of developer contributions, capital expenditures for fiscal year 2015 are projected to be approximately $240 to $255 million.

We are focused on operating only in attractive markets that can profitably support our stores as well as maintaining the quality of our stores and online platforms and, consequently, our brands. We conduct extensive demographic, marketing and lifestyle research to identify attractive retail markets with a high concentration of our target customers prior to our decision to construct a new store. We receive allowances from developers related to the construction of our stores, thereby reducing our cash

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investment in these stores. We received construction allowances aggregating $5.7 million in fiscal year 2014, $7.2 million in fiscal year 2013 and $10.6 million in fiscal year 2012. Two new Neiman Marcus locations are currently in development that will significantly expand our presence in New York:

Roosevelt Field. We expect to open an approximately 100,000 square-foot full-line Neiman Marcus store in Long Island, New York in the third quarter of fiscal year 2016. The store will be located in the Roosevelt Field Mall in Garden City, which is currently undergoing a $200 million redevelopment program.

Hudson Yards. We have signed a lease to open a flagship full-line Neiman Marcus store on Manhattan's flourishing west side at Hudson Yards, a new $20 billion, 28-acre mixed-use development project. The 250,000 square-foot, multi-level store, which we currently expect to open in fiscal year 2019, marks the first full-line Neiman Marcus store in New York City and will anchor the one-million-square-foot Shops at Hudson Yards. This new store will offer to New York's residents and visitors Neiman Marcus's signature mix of the world's most exclusive luxury brands and superior customer service.

In addition to the construction of new stores, we also invest in our existing stores to drive traffic, increase our selling opportunities and enhance customer service. Capital expenditures for existing stores include:

Remodels of Existing Stores. We have embarked on a significant capital investment program in our stores. We will remodel 23 of our 43 full-line stores, including Bergdorf Goodman in New York City and our Neiman Marcus stores in Beverly Hills, Boston, Houston and Palo Alto.

Designer Shops and Reallocations. Our capital investment program will modernize our stores and reallocate selling space to more productive merchandise categories. It will enhance the presentation of merchandise from select luxury designers through continued building of new designer shops within our stores and remodels of many existing designer shops. In fiscal year 2016, the program contemplates remodeling approximately 7% of our over 850 designer shops and increasing the number of designer shops by approximately 20%.

We believe these actions will strengthen our relationships with our designers, increase customer traffic and generate significant returns.

Technology. We believe capital investments for technology in our stores, online platforms, distribution facilities and support functions are necessary to provide a differentiated and innovative value proposition to our customers and grow our market share. As a result, we have undertaken an initiative to identify and develop ways in which technology can transform and grow our business. The components of our technology initiative include:

•: Personalize the shopping experience: We are able to associate approximately 90% of our total revenues with specific customers. Additionally, we are able to associate substantially all browsing behavior on our digital platforms with unique individuals. By aggregating this data and employing advanced analytics, we are able to generate a single view of these customers' engagement with our brands. We utilize this data to enhance the interactions with our customers when they are in our stores and personalize the presentation of merchandise to our customers when they shop online. We employ the same data to increase the efficiency and effectiveness of both our traditional and digital marketing. We intend to continue to invest in advanced algorithms and methodologies to improve the relevance of personalized merchandise suggestions and the effectiveness of our marketing spend.
•: Productivity: Our store management tracks a range of sales productivity metrics on a real-time basis, including comparisons of sales performance by category, department and brand, and comparisons of sales performance to targets. We also capture metrics to measure our sales

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associates' usage of our proprietary mobile technology, including the nature and frequency of communication with our customers. We believe that as our sales associates continue to optimize their utilization of the full and evolving functionality of our mobile technology, we will improve sales productivity and sales associate efficiency and increase the number and quality of customer-facing interactions.

•: NMG One: We are in the process of implementing a new Oracle-based merchandising system, which we call NMG One, that will enable us to purchase, share, manage and sell our inventory across channels more efficiently. We expect the implementation of NMG One to be substantially completed during calendar year 2016, and expect to see significant margin and cash flow benefits in the future.
•: Mobile: We are investing significant resources to enable our customers to browse and shop online and in store on mobile devices. We continually enhance the functionality and user interface of our platforms to incorporate the latest available technology. We expect that improvements in our mobile technology will enable us to generate further insights into our customers and drive greater engagement and loyalty.

Financial Information

For information on key financial highlights, including historical revenues, profits and total assets, see "Selected Consolidated Financial Information and Other Data." For additional information about our performance and financial condition, see "Management's Discussion and Analysis of Financial Condition and Results of Operations."

Competition

The luxury retail industry is highly competitive and fragmented. We compete for customers with specialty retailers, luxury and premium multi-branded retailers, national apparel chains, designer-owned proprietary boutiques, individual specialty apparel stores, pure-play online retailers and "flash sale" businesses. We compete for customers principally on the basis of quality and fashion, customer service, value, assortment and presentation of merchandise, marketing and customer loyalty programs and, in the case of Neiman Marcus and Bergdorf Goodman, store ambiance. Retailers that compete directly with us for distribution of luxury fashion brands include Saks Fifth Avenue, Barneys New York, Net-a-Porter, designer boutiques and other national, regional and local retailers. Nordstrom and Bloomingdale's feature a limited offering of luxury merchandise and compete with us to a lesser extent.

We believe we differ from other national retailers by our approach to omni-channel retailing, distinctive merchandise assortments, which we believe are more upscale than other luxury and premium multi-branded retailers, excellent customer service, prime real estate locations, premier online websites and elegant shopping environments. We believe we differentiate ourselves from regional and local luxury and premium retailers through our omni-channel approach to business, strong national brands, diverse product selection, loyalty program, customer service, prime shopping locations and strong designer relationships that allow us to offer the top merchandise from each designer. Designer-owned proprietary boutiques and specialty stores carry a much smaller selection of brands and merchandise, lack the overall shopping experience we provide, have a limited number of retail locations and generally offer more restrictive return policies.

Employees

As of August 1, 2015, we had approximately 14,900 full-time employees. Our staffing requirements fluctuate during the year as a result of the seasonality of the retail industry. We hire additional temporary associates and increase the hours of part-time employees during seasonal peak selling periods. Except for certain employees of Bergdorf Goodman representing less than 1% of our total employees, none of our employees are subject to a collective bargaining agreement. We believe that our relations with our employees are good.

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Seasonality

Our business, like that of most retailers, is affected by seasonal fluctuations in customer demand, product offerings and working capital expenditures. For additional information on seasonality, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Results—Seasonality."

Intellectual Property

We own certain tradenames and service marks, including the "Neiman Marcus," "Bergdorf Goodman" and "mytheresa" marks, that are important to our overall business strategy. These marks are valuable assets that consumers associate with luxury goods.

Legal Proceedings

Employment and Consumer Class Actions Litigation

On April 30, 2010, a Class Action Complaint for Injunction and Equitable Relief was filed against the Company, Newton Holding, LLC, TPG Capital, L.P. and Warburg Pincus LLC in the U.S. District Court for the Central District of California by Sheila Monjazeb, individually and on behalf of other members of the general public similarly situated. On July 12, 2010, all defendants except for the Company were dismissed without prejudice, and on August 20, 2010, this case was dismissed by Ms. Monjazeb and refiled in the Superior Court of California for San Francisco County. This complaint, along with a similar class action lawsuit originally filed by Bernadette Tanguilig in 2007, sought monetary and injunctive relief and alleged that the Company has engaged in various violations of the California Labor Code and Business and Professions Code, including without limitation, by (1) asking employees to work "off the clock," (2) failing to provide meal and rest breaks to its employees, (3) improperly calculating deductions on paychecks delivered to its employees and (4) failing to provide a chair or allow employees to sit during shifts. The Monjazeb and Tanguilig class actions were deemed "related" cases and were then brought before the same trial court judge. On October 24, 2011, the court granted the Company's motion to compel Ms. Monjazeb and Juan Carlos Pinela (a co-plaintiff in the Tanguilig case) to arbitrate their individual claims in accordance with the Company's Mandatory Arbitration Agreement, foreclosing their ability to pursue a class action in court. However, the court's order compelling arbitration did not apply to Ms. Tanguilig because she is not bound by the Mandatory Arbitration Agreement. Further, the court determined that Ms. Tanguilig could not be a class representative of employees who are subject to the Mandatory Arbitration Agreement, thereby limiting the putative class action to those associates who were employed between December 2003 and July 15, 2007 (the effective date of our Mandatory Arbitration Agreement). Following the court's order, Ms. Monjazeb and Mr. Pinela filed demands for arbitration with the American Arbitration Association (AAA) seeking to arbitrate not only their individual claims, but also class claims, which the Company asserted violated the class action waiver in the Mandatory Arbitration Agreement. This led to further proceedings in the trial court, a stay of the arbitrations, and a decision by the trial court, on its own motion, to reconsider its order compelling arbitration. The trial court ultimately decided to vacate its order compelling arbitration due to a recent California appellate court decision. Following this ruling, the Company timely filed two separate appeals, one with respect to Mr. Pinela and one with respect to Ms. Monjazeb, with the California Court of Appeal, asserting that the trial court did not have jurisdiction to change its earlier determination of the enforceability of the arbitration agreement. The appeal with respect to Mr. Pinela has been fully briefed, and oral argument was held on June 9, 2015. On June 29, 2015, the California Court of Appeal issued its order affirming the trial court's denial of our motion to compel arbitration and awarding Mr. Pinela his costs of appeal. On July 13, 2015, we filed our petition for rehearing with the California Court of Appeal, which was denied on July 29, 2015. The appeal with respect to Ms. Monjazeb was dismissed since final approval of the class action settlement (as described below) was granted.

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Notwithstanding the appeal, the trial court decided to set certain civil penalty claims asserted by Ms. Tanguilig for trial on April 1, 2014. In these claims, Ms. Tanguilig sought civil penalties under the Private Attorneys General Act based on the Company's alleged failure to provide employees with meal periods and rest breaks in compliance with California law. On December 10, 2013, the Company filed a motion to dismiss all of Ms. Tanguilig's claims, including the civil penalty claims, based on her failure to bring her claims to trial within five years as required by California law. After several hearings, on February 28, 2014, the court dismissed all of Ms. Tanguilig's claims in the case and vacated the April 1, 2014 trial date. The court has awarded the Company its costs of suit in connection with the defense of Ms. Tanguilig's claims, but denied its request of an attorneys' fees award from Ms. Tanguilig. Ms. Tanguilig filed a notice of appeal from the dismissal of all her claims, as well as a second notice of appeal from the award of costs, both of which are pending before the California Court of Appeal. Should the California Court of Appeal reverse the trial court's dismissal of all of Ms. Tanguilig's claims, the litigation will resume, and Ms. Tanguilig will seek class certification of the claims asserted in her Third Amended Complaint. If this occurs, the scope of her class claims will likely be reduced by the class action settlement and release in the Monjazeb case (as described below); however, that settlement does not cover claims asserted by Ms. Tanguilig for alleged Labor Code violations from approximately December 19, 2003 to August 20, 2006 (the beginning of the settlement class period in the Monjazeb case). Briefing on the appeals is underway, but no date has been set for oral argument.

In Ms. Monjazeb's class action, a settlement was reached at a mediation held on January 25, 2014, and the court granted final approval of the settlement after the final approval hearing held on September 18, 2014. Notwithstanding the settlement of the Monjazeb class action, Ms. Tanguilig filed a motion on January 26, 2015 seeking to recover catalyst attorneys' fees from the Company. A hearing was held on February 24, 2015, and the court issued an order on February 25, 2015 allowing Ms. Tanguilig to proceed with her motion to recover catalyst attorneys' fees related to the Monjazeb settlement. On April 8, 2015, Ms. Tanguilig filed her motion for catalyst attorneys' fees. A hearing on the motion was held on July 23, 2015 and the motion was denied by the court on July 28, 2015.

Based upon the settlement agreement with respect to Ms. Monjazeb's class action claims, we recorded our currently estimable liabilities with respect to both Ms. Monjazeb's and Ms. Tanguilig's employment class actions litigation claims in fiscal year 2014, which amount was not material to our financial condition or results of operations. With respect to the Monjazeb matter, the settlement funds have been paid by the Company and have been disbursed by the claims administrator in accordance with the settlement. We will continue to evaluate the Tanguilig matter, and our recorded reserve for such matter, based on subsequent events, new information and future circumstances.

In addition to the foregoing matters, the National Labor Relations Board (NLRB) has been pursuing a complaint alleging that the Mandatory Arbitration Agreement's class action prohibition violates employees' rights to engage in concerted activity, which was submitted to an administrative law judge (ALJ) for determination on a stipulated record. Recently, the ALJ issued a recommended decision and order finding that the Company's Arbitration Agreement and class action waiver violated the National Labor Relations Act. The matter has now been transferred to the NLRB for further consideration and decision.

On August 7, 2014, a putative class action complaint was filed against The Neiman Marcus Group LLC in Los Angeles County Superior Court by a customer, Linda Rubenstein, in connection with the Company's Last Call stores in California. Ms. Rubenstein alleges that the Company has violated various California consumer protection statutes by implementing a marketing and pricing strategy that suggests that clothing sold at Last Call stores in California was originally offered for sale at full-line Neiman Marcus stores when allegedly, it was not, and is allegedly of inferior quality to clothing sold at the full-line stores. Ms. Rubenstein also alleges that the Company lacks adequate information to support its comparative pricing labels. On September 12, 2014, we removed the case to the U.S. District Court for the Central District of California. On October 17, 2014, we filed a motion to dismiss the complaint,

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which the court granted on December 12, 2014. In its order dismissing the complaint, the court granted Ms. Rubenstein leave to file an amended complaint. Ms. Rubenstein filed her first amended complaint on December 22, 2014. On January 6, 2015, we filed a motion to dismiss the first amended complaint, which the court granted on March 2, 2015. In its order dismissing the first amended complaint, the court granted Ms. Rubenstein leave to file a second amended complaint, which she filed on March 17, 2015. On April 6, 2015, we filed a motion to dismiss the second amended complaint. On May 12, 2015, the court granted our motion to dismiss the second amended complaint in its entirety, without leave to amend, and on June 9, 2015, Ms. Rubenstein filed a notice to appeal the court's ruling.

On February 2, 2015, a putative class action complaint was filed against Bergdorf Goodman, Inc. in the Supreme Court of the State of New York, County of New York, by Marney Zaslav. Ms. Zaslav seeks monetary relief and alleges that she and other similarly situated individuals were misclassified as interns exempt from minimum wage requirements instead of as employees and, therefore, were not provided with proper compensation under the New York Labor Law. The Company is vigorously defending this matter.

Cyber-Attack Class Actions Litigation

Three class actions relating to the Cyber-Attack were filed in January 2014 and later voluntarily dismissed by the plaintiffs between February and April 2014. The plaintiffs had alleged negligence and other claims in connection with their purchases by payment cards and sought monetary and injunctive relief. Melissa Frank v. The Neiman Marcus Group, LLC, et al., was filed in the U.S. District Court for the Eastern District of New York on January 13, 2014 but was voluntarily dismissed by the plaintiff on April 15, 2014, without prejudice to her right to re-file a complaint. Donna Clark v. Neiman Marcus Group LTD LLC was filed in the U.S. District Court for the Northern District of Georgia on January 27, 2014 but was voluntarily dismissed by the plaintiff on March 11, 2014, without prejudice to her right to re-file a complaint. Christina Wong v. The Neiman Marcus Group, LLC, et al., was filed in the U.S. District Court for the Central District of California on January 29, 2014, but was voluntarily dismissed by the plaintiff on February 10, 2014, without prejudice to her right to re-file a complaint. Three additional putative class actions relating to the Cyber-Attack were filed in March and April 2014, also alleging negligence and other claims in connection with plaintiffs' purchases by payment cards. Two of the cases, Katerina Chau v. Neiman Marcus Group LTD Inc., filed in the U.S. District Court for the Southern District of California on March 14, 2014, and Michael Shields v. The Neiman Marcus Group, LLC, filed in the U.S. District Court for the Southern District of California on April 1, 2014, were voluntarily dismissed, with prejudice as to Chau and without prejudice as to Shields. The third case, Hilary Remijas v. The Neiman Marcus Group, LLC, was filed on March 12, 2014 in the U.S. District Court for the Northern District of Illinois. On June 2, 2014, an amended complaint in the Remijas case was filed, which added three plaintiffs (Debbie Farnoush and Joanne Kao, California residents; and Melissa Frank, a New York resident) and asserted claims for negligence, implied contract, unjust enrichment, violation of various consumer protection statutes, invasion of privacy and violation of state data breach laws. The Company moved to dismiss the Remijas amended complaint on July 2, 2014. On September 16, 2014, the court granted the Company's motion to dismiss the Remijas case on the grounds that the plaintiffs lacked standing due to their failure to demonstrate an actionable injury. On September 25, 2014, plaintiffs appealed the district court's order dismissing the case to the Seventh Circuit Court of Appeals. Oral argument was held on January 23, 2015. On July 20, 2015, the Seventh Circuit Court of Appeals reversed the district court's ruling and remanded the case to the district court for further proceedings. On August 3, 2015, we filed a petition for rehearing en banc. Andrew McClease v. The Neiman Marcus Group, LLC was filed in the U.S. District Court for the Eastern District of North Carolina on December 30, 2014, alleging negligence and other claims in connection with Mr. McClease's purchase by payment card. On March 9, 2015, the McClease case was voluntarily dismissed without prejudice by stipulation of the parties.

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In addition to class actions litigation, payment card companies and associations may require us to reimburse them for unauthorized card charges and costs to replace cards and may also impose fines or penalties in connection with the security incident, and enforcement authorities may also impose fines or other remedies against us. We have also incurred other costs associated with this security incident, including legal fees, investigative fees, costs of communications with customers and credit monitoring services provided to our customers. At this point, we are unable to predict the developments in, outcome of, and economic and other consequences of pending or future litigation or regulatory investigations related to, and other costs associated with, this matter. We will continue to evaluate these matters based on subsequent events, new information and future circumstances.

Other Litigation

In addition to the matters discussed above, we are currently involved in various other legal actions and proceedings that arose in the ordinary course of business. With respect to the matters described above as well as all other current outstanding litigation involving us, we believe that any liability arising as a result of such litigation will not have a material adverse effect on our financial position, results of operations or cash flows.

Regulation

The credit card operations that are conducted under our arrangements with Capital One are subject to numerous federal and state laws that impose disclosure and other requirements upon the origination, servicing and enforcement of credit accounts and limitations on the maximum amount of finance charges that may be charged by a credit provider. In addition to our proprietary credit cards, credit to our customers is also provided primarily through third parties. Any regulation or change in the regulation of credit arrangements that would materially limit the availability of credit to our customer base could adversely affect our results of operations or financial condition.

Our practices, as well as those of our competitors, are subject to review in the ordinary course of business by the Federal Trade Commission and are subject to numerous federal and state laws. Additionally, we are subject to certain customs, anti-corruption laws, truth-in-advertising and other laws, including consumer protection regulations that regulate retailers generally and/or govern the importation, promotion and sale of merchandise. We undertake to monitor changes in these laws and believe that we are in material compliance with all applicable state and federal regulations with respect to such practices.

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PROPERTIES

Our main corporate headquarters are located at the Downtown Neiman Marcus store location in Dallas, Texas. Other operating headquarters are located in Dallas, Texas and New York, New York.

Properties that we use in our operations include Neiman Marcus stores, Bergdorf Goodman stores, Last Call stores and distribution, support and office facilities. As of August 1, 2015, the approximate aggregate square footage of the properties used in our operations was as follows:



Neiman Marcus Stores	856,000	2,362,000	2,294,000	5,512,000
Bergdorf Goodman Stores	—	—	316,000	316,000
Last Call Stores and Other	—	—	1,107,000	1,107,000
Distribution, Support and Office Facilities	1,330,000	150,000	1,517,000	2,997,000

Neiman Marcus Stores. As of August 1, 2015, we operated 41 Neiman Marcus stores, with an aggregate total property size of approximately 5,512,000 square feet. The following table sets forth certain details regarding each Neiman Marcus store:

Neiman Marcus Stores

Locations

Dallas, Texas (Downtown)(1)	1908	129,000
Dallas, Texas (North Park)(2)*	1965	218,000
Houston, Texas (Galleria)(3)*	1969	224,000
Bal Harbour, Florida(2)	1971	97,000
Atlanta, Georgia(2)*	1973	206,000
St. Louis, Missouri(2)	1975	145,000
Northbrook, Illinois(3)	1976	144,000
Fort Worth, Texas(2)	1977	119,000
Washington, D.C.(2)*	1978	130,000
Newport Beach, California(3)*	1978	153,000
Beverly Hills, California(1)*	1979	185,000
Westchester, New York(2)*	1981	138,000
Las Vegas, Nevada(2)	1981	174,000
Oak Brook, Illinois(2)	1982	98,000
San Diego, California(2)	1982	106,000
Fort Lauderdale, Florida(3)*	1983	92,000
San Francisco, California(4)*	1983	252,000
Chicago, Illinois (Michigan Ave.)(2)	1984	188,000
Boston, Massachusetts(2)	1984	111,000
Palo Alto, California(3)*	1986	120,000
McLean, Virginia(4)*	1990	130,000

Locations

Denver, Colorado(3)*	1991	90,000
Scottsdale, Arizona(2)*	1992	114,000
Troy, Michigan(3)*	1993	157,000
Short Hills, New Jersey(3)*	1996	137,000
King of Prussia, Pennsylvania(3)*	1996	145,000
Paramus, New Jersey(3)*	1997	141,000
Honolulu, Hawaii(3)	1999	181,000
Palm Beach, Florida(2)	2001	53,000
Plano, Texas (Willow Bend)(4)*	2002	156,000
Tampa, Florida(3)*	2002	96,000
Coral Gables, Florida(2)*	2003	136,000
Orlando, Florida(4)*	2003	95,000
San Antonio, Texas(4)*	2006	120,000
Boca Raton, Florida(2)	2006	136,000
Charlotte, North Carolina(3)	2007	80,000
Austin, Texas(3)	2007	80,000
Natick, Massachusetts(4)*	2008	103,000
Woodland Hills, California (Topanga)(3)*	2009	120,000
Bellevue, Washington(2)	2010	125,000
Walnut Creek, California(3)	2012	88,000

(1): Owned subject to partial ground lease.
(2): Leased.
(3): Owned buildings on leased land.

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(4): Owned.
*: Mortgaged to secure our Senior Secured Credit Facilities and the 2028 Debentures.

Bergdorf Goodman Stores. We operate two Bergdorf Goodman stores, both of which are located in Manhattan at 58^th Street and Fifth Avenue. The following table sets forth certain details regarding these stores:

Bergdorf Goodman Stores

Locations

New York City (Main)(1)	1901	250,000
New York City (Men's)(1)*	1991	66,000

(1): Leased.
*: Mortgaged to secure our senior secured credit facilities and the 2028 Debentures.

Last Call Stores. As of August 1, 2015, we operated 43 Last Call stores in 16 states that average approximately 25,000 square feet each in size.

Distribution, Support and Office Facilities. We own approximately 41 acres of land in Longview, Texas, where our primary distribution facility is located. The Longview facility is the principal merchandise processing and distribution facility for Neiman Marcus stores. In the spring of 2013, we opened a 198,000 square foot distribution facility in Pittston, Pennsylvania to support the future growth and initiatives of the Company. The facility in Pittston replaced the distribution facility we previously utilized in Dayton, New Jersey. We lease four regional service centers in New York, Florida, Texas and California.

We also own approximately 50 acres of land in Irving, Texas, where our online operating headquarters and distribution facility are located. In addition, we currently utilize another regional distribution facility in Dallas, Texas to support our online operations. We also utilize a 107,000 square foot facility outside of Munich, Germany to support our MyTheresa operations.

Lease Terms. We lease a significant percentage of our stores and, in certain cases, the land upon which our stores are located. The terms of these leases, assuming all outstanding renewal options are exercised, range from two to 130 years. The lease on the Bergdorf Goodman Main Store expires in 2050, with no renewal options, and the lease on the Bergdorf Goodman Men's Store expires in 2020, with a 10-year renewal option. Most leases provide for monthly fixed rentals or contingent rentals based upon revenues in excess of stated amounts and normally require us to pay real estate taxes, insurance, common area maintenance costs and other occupancy costs.

For further information on our properties and lease obligations, see "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 15 of the Notes to Consolidated Financial Statements.

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MANAGEMENT

Directors and Executive Officers

The following table sets forth certain information regarding the Company's executive officers and members of our Board of Directors as of August 1, 2015:

Name		Position

Karen W. Katz	58	Director, President and Chief Executive Officer
Donald T. Grimes	53	Executive Vice President, Chief Operating Officer and Chief Financial Officer
James J. Gold	51	President, Chief Merchandising Officer
John E. Koryl	45	President, Neiman Marcus Stores and Online
Joshua G. Schulman	43	President of Bergdorf Goodman and President of NMG International
Wanda M. Gierhart	51	Senior Vice President, Chief Marketing Officer
Michael R. Kingston	48	Senior Vice President and Chief Information Officer
Thomas J. Lind	59	Senior Vice President, Corporate Business Strategy, Properties and Store Development
Tracy M. Preston	49	Senior Vice President and General Counsel
Stacie R. Shirley	46	Senior Vice President, Finance and Treasurer
T. Dale Stapleton	57	Senior Vice President and Chief Accounting Officer
Joseph N. Weber	48	Senior Vice President, Chief Human Resources Officer
Nora A. Aufreiter	55	Director
Norman H. Axelrod	63	Director
Philippe E. Bourguignon	67	Director
Adam B. Brotman	45	Director
Shane D. Feeney	45	Director
David B. Kaplan	47	Director
Scott T. Nishi	40	Director
Adam L. Stein	39	Director

Executive Officers

Karen W. Katz. Ms. Katz has served as our Director, President and Chief Executive Officer since October 6, 2010. She served as Executive Vice President and as a member of the Office of the Chairman from October 2007 until October 2010. From December 2002 to October 2010, she served as President and Chief Executive Officer of Neiman Marcus Stores. Ms. Katz is a member of the board of directors of Under Armour, Inc., a performance footwear, apparel and equipment company, and formerly served on the board of directors of Pier 1 Imports, Inc., a home decor and furniture retailer. Since joining us in 1985, Ms. Katz has been in charge of a variety of our business units and has demonstrated strong and consistent leadership. She has an extensive understanding of our customers and the retail industry that enables her to promote a unified direction for both our Board of Directors and management.

Donald T. Grimes. Mr. Grimes was elected Executive Vice President, Chief Operating Officer, and Chief Financial Officer on June 15, 2015. Mr. Grimes was previously the Senior Vice President, Chief Financial Officer, Principal Accounting Officer and Treasurer at Wolverine World Wide, Inc., a global branded footwear and apparel corporation. Prior to joining Wolverine World Wide, Inc. in 2008, Mr. Grimes was Executive Vice President and Chief Financial Officer for Keystone Automotive Operations, Inc., a distributor and marketer of specialty aftermarket automotive equipment. Prior to Keystone, Mr. Grimes served 15 years with Brown-Forman Corporation, a global spirits and wine company, where he held a series of senior corporate and divisional finance roles, including Vice President, Beverage Finance for the company's global beverage business; Vice President,

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Corporate Planning & Analysis; Chief Financial Officer of Brown-Forman Spirits Americas and Vice President, Corporate Development. He started his career as a Certified Public Accountant with Coopers & Lybrand (now PricewaterhouseCoopers LLP).

James J. Gold. In April 2014, Mr. Gold was elected President, Chief Merchandising Officer with responsibility for leading our merchandising and planning organization for Neiman Marcus Stores and Online. His prior service includes President and Chief Executive Officer of Specialty Retail from October 2010 to April 2014 and from May 2004 to October 2010, President and Chief Executive Officer of Bergdorf Goodman. Mr. Gold served as Senior Vice President, General Merchandise Manager of Neiman Marcus Stores from December 2002 to May 2004, as Division Merchandise Manager from June 2000 to December 2002, and as Vice President of the Neiman Marcus Last Call Clearance Division from March 1997 to June 2000.

John E. Koryl. Mr. Koryl was elected President, Neiman Marcus Stores and Online in April 2014 responsible for store operations and sales, e-commerce domestic and international operations and sales, site merchandising, site optimization and customer care. From June 2011 to April 2014, he served as President of Neiman Marcus Direct. From August 2009 until June 2011, he held the position of Senior Vice President, eCommerce Marketing & Analytics at Williams-Sonoma, Inc., a premier specialty retailer of home furnishings. From September 2006 until August 2009, he was Senior Director, Marketing Solutions with eBay, Inc., an online auction and shopping website, and held various other managerial positions with eBay, Inc. since June 2005. Mr. Koryl is also currently a director of Guitar Center Holdings, Inc., a musical instruments retailer, and has previously served on the board of Petco Animal Supplies, Inc., a leading pet specialty retailer.

Joshua G. Schulman. Mr. Schulman joined us as President of Bergdorf Goodman on May 7, 2012. Following the acquisition of MyTheresa in October 2014, he also became President of NMG International. From 2007 until February 2012, Mr. Schulman was Chief Executive Officer of Jimmy Choo, Ltd, a fashion designer and retailer. From 2005 until 2007, he served as President of Kenneth Cole New York and in senior executive roles at Gap, Inc. as Managing Director/International Strategic Alliances and Senior Vice President/International Merchandising and Product Development, both fashion design and retailing companies. Previously he served in senior executive roles at Gucci Group NV, a fashion designer and retailer, from 1997 to 2005.

Wanda M. Gierhart. Ms. Gierhart joined us in August 2009 as Senior Vice President, Chief Marketing Officer. From 2007 to 2009, she served as President and Chief Executive Officer of TravelSmith Outfitters, Inc., a travel apparel and accessory retailer, and from 2004 to 2006 she served as Executive Vice President, Chief Marketing and Merchandising Officer of Design Within Reach, Inc., a multichannel furniture retailer.

Michael R. Kingston. Mr. Kingston has served as Senior Vice President and Chief Information Officer since April 23, 2012. Prior to joining us on April 23, 2012, he served as Executive Vice President, Enterprise Transformation and Technology for Ann Inc., the parent company of Ann Taylor Stores Corp., a women's apparel retailer, from 2011 to 2012. Prior to that position, he served as Senior Vice President, Chief Information Officer of Ann Inc. from May 2006 to December 2010. From February 2003 until May 2006, he served as Vice President, Applications for Coach, Inc., a designer and maker of luxury handbags and accessories.

Thomas J. Lind. Mr. Lind was appointed Senior Vice President, Corporate Strategy, Properties and Store Development effective August 1, 2014. He was appointed Senior Vice President, Corporate Strategies in July 2013 and from 2010 to July 2013 he served as Senior Vice President, Program Management. Since joining us in 1983, he has served in various executive positions including Senior Vice President, Managing Director, Last Call from 2009 until 2010; Senior Vice President, Director of Stores and Store Operations from 2006 until 2009; and Senior Vice President, Director of Stores from

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2000 until 2006. From August 2012 until July 2013, Mr. Lind was on assignment as Chief Operating Officer of Glamour Sales Holdings Limited, a privately held e-commerce company based in Hong Kong.

Tracy M. Preston. Ms. Preston joined us as Senior Vice President and General Counsel on February 18, 2013. From January 2002 until February 2013, she held various positions, including Chief Compliance Officer and Chief Counsel for global supply chain, global human resources and litigation, at Levi Strauss & Co., a brand-name apparel company. Previously she was a partner with the law firm of Orrick, Herrington & Sutcliffe LLP.

Stacie R. Shirley. Ms. Shirley was elected Senior Vice President, Finance and Treasurer in September 2010. From December 2001 until September 2010, she served as Vice President, Finance and Treasurer. Ms. Shirley served as Vice President, Finance and Treasurer at CompUSA Inc. from 1999 to 2001.

T. Dale Stapleton. In September 2010, Mr. Stapleton was elected Senior Vice President and Chief Accounting Officer. From August 2001 to September 2010, he served as Vice President and Controller. Mr. Stapleton served as Vice President and Controller at CompUSA Inc. from 1999 to 2000.

Joseph N. Weber. Mr. Weber joined us on September 4, 2012 as Senior Vice President, Chief Human Resources Officer. Prior to joining us, he held various positions at Bank of America Corporation since 2006, most recently Head, Human Resources Europe, Middle East, Africa, Latin America and Canada. Previously he was with Dell, Inc., a technology products and services company, from 2000 until 2006 and General Electric Company, a global industrial company, from 1995 until 2000.

Directors

Information pertaining to Ms. Katz may be found above in the section entitled "—Executive Officers."

Nora A. Aufreiter. Ms. Aufreiter has served as a member of our Board of Directors since January 2014. She is a Director Emeritus of McKinsey and Company, a global management consulting firm, retiring in June 2014 after more than 27 years where she was a Director and senior partner. During her years at McKinsey, Nora worked with major retailers, financial institutions and other consumer-facing companies in the U.S., Canada and internationally. Over the course of her career she led the North American Retail practice, the Toronto office, as well as McKinsey's Consumer Digital, Omni Channel and Branding service lines. Nora also serves on the board of directors of The Kroger Company, one of the world's largest supermarket operators, and on the board of directors of Scotiabank, Canada's most international bank with operations in over 55 countries. Ms. Aufreiter began her career at Bank of America as a corporate finance officer. She has an M.B.A. from the Harvard Business School and a H.B.A. from The University of Western Ontario's Ivey School of Business. Ms. Aufreiter's digital, omni channel, branding and retail experience greatly enhances our Board of Directors' effectiveness.

Norman H. Axelrod. Mr. Axelrod has served as a member of our Board of Directors since October 2013. Beginning in 1988, Mr. Axelrod served as Chief Executive Officer and a member of the board of directors of Linens 'n Things, Inc., a retailer of home textiles, housewares and decorative home accessories, was appointed as Chairman of its board of directors in 1997, and served in such capacities until its acquisition in February 2006. Mr. Axelrod is also the Chairman of the boards of directors of the parent entities of Guitar Center, Inc., a musical instruments retailer, and Floor and Decor Outlets of America, Inc., a hard surface flooring and related accessories retailer, and serves on the boards of directors of the parent entities of Smart & Final Stores Inc., a warehouse-style food and supply retailer, 99 Cents Only Stores LLC, a deep-discount retailer, and Jaclyn, Inc., a handbags and apparel company. Mr. Axelrod has also previously served as the Chairman of the boards of directors of

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GNC Holdings, Inc., a specialty retailer of health and wellness products, National Bedding Company LLC, a mattress and bedding product manufacturer, and Simmons Company, a mattress and bedding product manufacturer, and as a member of the boards of directors of Reebok International Ltd., a leading worldwide designer and marketer of sports, fitness and casual footwear, apparel and equipment, and Maidenform Brands, Inc., an intimate apparel retailer. Mr. Axelrod currently provides and has provided in the past consulting services to certain Ares entities. Mr. Axelrod received a B.S. in Management and Marketing from Lehigh University where he graduated summa cum laude and an M.B.A. from New York University. Mr. Axelrod's vast experience led to the conclusion that he should serve as a member of our Board of Directors.

Philippe E. Bourguignon. Mr. Bourguignon has served as a member of our Board of Directors since April 2014. He serves as Vice Chairman of Revolution Places LLC, a travel and tourism company that promotes a healthy lifestyle, and served as CEO of Exclusive Resorts, a premier travel and lifestyle club, until May 2015, at which point he was appointed Executive Co-Chairman. He also acts as Chairman of Miraval Resort, an acclaimed resort located in northern Tucson, Arizona. Prior to joining Revolution Places, Mr. Bourguignon was co-CEO of the Davos-based World Economic Forum, an international institution committed to improving the state of the world through public-private cooperation, in 2003 and 2004 and Chairman and CEO of Euro Disney, an operator of European theme parks and hotels. He served previously as chairman and CEO of Club Med, an operator of all-inclusive resorts. Mr. Bourguignon began his career in tourism with the Accor group, one of the largest hotel groups in the world. During his 14-year tenure with Accor, he served as vice president of Development for Asia/Middle East and executive vice president of North America before being promoted to president of Accor for the Asia/Pacific region. Mr. Bourguignon currently serves on the board of directors of VF Wine, Inc., a wine and spirit resource provider. He previously served as a member of the board of directors for Zipcar, a car-sharing transportation provider, and eBay, an online marketplace provider. Mr. Bourguignon's qualifications to serve on our Board of Directors include his broad-based knowledge of luxury brands, entrepreneurial spirit and keen sense of business acumen.

Adam B. Brotman. Mr. Brotman has served as a member of our Board of Directors since April 2014. He is chief digital officer for Starbucks Coffee Company, a premier roaster and retailer of specialty coffee, where he serves as a key member of Starbucks senior leadership team. Prior to joining Starbucks in April 2009, Mr. Brotman held several key leadership positions at leading digital media companies, and most recently was CEO of Barefoot Yoga Company, a consumer products e-commerce company. He served as Senior Vice President at Corbis, a digital content and worldwide entertainment and licensing company, and founded PlayNetwork, Inc., a leading provider of in-store digital media and entertainment services for businesses worldwide. Mr. Brotman holds a Bachelor of Arts degree from the University of California, Los Angeles, and a Juris Doctor from the University of Washington. He serves on several corporate and non-profit boards including the University of Washington Master of Communication in Digital Media advisory board. He previously served on the board of directors of PlayNetwork, Inc. Mr. Brotman's vast experience in today's technology and social media is a great asset to our omni-channel brand.

Shane D. Feeney. Mr. Feeney has served as a member of our Board of Directors since October 2013. He is a Managing Director and Head of Direct Private Equity at CPPIB Equity Investments Inc. (CPPIB Equity), which is affiliated with certain of our Sponsors. In 2010, Mr. Feeney joined CPPIB Equity from Bridgepoint Capital Limited, a major international private equity group in London, U.K. Prior to joining Bridgepoint Capital Limited, Mr. Feeney was a partner and founding member of Hermes Private Equity Limited's direct investing business where he was involved in several U.K. private equity investments between 2003 and 2009. From 1998 through 2003, Mr. Feeney was an Associate Director with Morgan Grenfell Private Equity Limited in London where he worked on numerous European private equity transactions from origination to exit across multiple industry sectors. Mr. Feeney previously served on the board of directors of the parent entities of 99 Cents Only

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Stores LLC, a deep-discount retailer, Air Distribution Technologies, Inc., a provider of residential and commercial air distribution and ventilation solutions, The Gates Corporation, a global diversified industrial company, Livingston International, Inc., a provider of customs brokerage and trade compliance services, and Tomkins Building Products, Inc., a manufacturer of automotive and construction products. Mr. Feeney received a B.A. in Economics from Dartmouth College and an M.B.A. from INSEAD. Mr. Feeney's financial expertise, as well as experience as a private equity investor evaluating and managing investments in companies across various industries and as a member of the boards of directors of other private companies, led to the conclusion that he should serve as a member of our Board of Directors.

David B. Kaplan. Mr. Kaplan has served as a member of our Board of Directors since October 2013, including as Chairman since December 2013. Mr. Kaplan is a Co-Founder of Ares Management, L.P. (Ares Management), which is affiliated with some of our Sponsors, and a Director and Partner of Ares Management GP LLC, Ares Management's general partner. He is a Partner of Ares Management, Co-Head of its Private Equity Group and a member of its Management Committee. He additionally serves on several of the investment committees for the funds managed by the Ares Private Equity Group. Mr. Kaplan joined Ares Management in 2003 from Shelter Capital Partners, LLC, a private equity firm, where he was a Senior Principal from June 2000 to April 2003. From 1991 through 2000, Mr. Kaplan was affiliated with, and a Senior Partner of, Apollo Management, L.P., a global alternative investment manager, and its affiliates, during which time he completed multiple private equity investments from origination through exit. Prior

Neiman Marcus Group, Inc. S-1