A Tough Agenda Faces Neiman Marcus’ New CEO
Late last week the Neiman Marcus Group named former Ralph Lauren executive Geoffroy van Raemdonck as their new CEO, replacing company veteran Karen Katz (full disclosure: once my boss). While not terribly surprising given the company’s struggles under a mountain of debt, extremely rocky “NMG One” systems implementation and largely stagnant growth, the move does come at a critical time for North America’s leading luxury retailer. As van Raemdonck takes the helm next month (and Katz moves to a Board position), he will be faced with addressing several important and vexing challenges. As I was SVP of strategy, business development & multi-channel marketing for the Neiman Marcus Group from 2004-08 (most of that time reporting to then CEO Burt Tansky) I have a somewhat unique perspective on what requires intense and urgent focus. As I wrote nearly a year ago, much of luxury retail has hit a wall. Many brands, including Neiman Marcus and its most direct competitor Saks Fifth Avenue, have struggled to grow both top and bottom line as core customers “age out” of peak spending years and very few new store locations exist. Neiman’s also has one of the highest e-commerce’s penetration in the industry and much of that growth is now merely channel shift. Competition is also intensifying. In addition to the myriad online competitors, many of Neiman’s key vendors wisely continue to invest in direct-to-consumer growth strategies as they recognize the advantages of forging a direct relationship with consumers, the strategic brand control that operating their own stores and website affords and the opportunity for greater margins. Some are even pulling back from wholesale selling to create more exclusivity and more tightly managed distribution. Read more at Forbes.
