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Neiman Marcus has big 2023 plans: It’s spending on stores and going global

The Dallas-based luxury retailer plans to invest $200 million into stores and launch an international online business with its New York-based Bergdorf Goodman brand.

Neiman Marcus CEO Geoffroy van Raemdonck hits his five-year anniversary in a couple of weeks just as wealthy U.S. consumers are fueling a boom in luxury shopping.

Van Raemdonck is embarking on big plans, including spending $200 million to upgrade stores and working to fine-tune the customer experience by getting merchandise to shoppers faster.

The company will also launch an international online business with the retailer’s New York-based Bergdorf Goodman brand.

Store remodels will be spread out over three years and landlords will kick in half of the money spent, van Raemdonck said. Atlanta is already done and features a new first-floor men’s shoe salon with a bar.

Neiman Marcus will also move its corporate headquarters into Cityplace in a few months, with a hub in New York up and running.

Neiman Marcus CEO Geoffroy van Raemdonck
Neiman Marcus CEO Geoffroy van Raemdonck(Tom Fox / Staff Photographer )

“The economy may become more volatile, but we’re focused on our priorities and we’re laser-focused on the customer experience,” van Raemdonck said.

His tenure, which started in February 2018 and included leading the 115-year-old retailer through a pandemic and a bankruptcy reorganization, has left the company on stronger footing.

Van Raemdonck doesn’t view Neiman Marcus as a department store. Instead, he considers it to be in the relationship business of bringing together the best brands with an upscale customer.

Revenue increased 30% in its last fiscal year that ended in July, as retail spiked after the lows of the pandemic when stores were closed. Momentum has continued with sales up 6% in its first quarter that ended in October.

Holiday season

So far, Neiman Marcus, which is privately held, hasn’t said how its holiday shopping season went. It will report the current quarter that ends this month to its shareholders in March. Neiman Marcus is owned by three of the biggest wealth funds on Wall Street: PIMCO, Davidson Kempner Capital and Sixth Street.

Rivals Nordstrom and Macy’s have said holiday sales were weaker than expected. Sales declined 1.7% at Nordstrom’s department stores during the combined November-December period.

But both Nordstrom and Macy’s said higher-income customers were still showing a willingness to spend. Macy’s CEO Jeff Gennette said the retailer’s higher-end Bloomingdale’s and Bluemercury stores continued to outperform Macy’s throughout the holiday season.

That bodes well for Neiman Marcus, which says about 80% of its customers have a net worth of at least $1 million. About 2% of its customers, which represents thousands of shoppers, spend an average of $27,000 a year with the retailer.

Saks Off 5th CEO Paige Thomas said customer spending had dropped off as the season started and that led to more discounting. Saks Fifth Avenue is cutting jobs, according to the Wall Street Journal, which quoted sources saying the luxury retailer’s digital business, Saks.com, is eliminating 100 jobs or 3.5% of its workforce.

An illustration of an interior common area of the future Neiman Marcus corporate office in...
An illustration of an interior common area of the future Neiman Marcus corporate office in Cityplace Tower. (Neiman Marcus/Gensler)

Move to Cityplace

Neiman Marcus has shuffled some of its top jobs with new recent hires, but it hasn’t had a major staff reduction since it closed down its Last Call operation in late 2020. The company has 12,000 employees and most of its corporate staff will still be in Dallas when it moves its headquarters into Cityplace.

Technology that’s being built into the Dallas office will support remote work, which van Raemdonck said has helped the company with retention and hiring.

Lana Todorovich, president and chief merchandising officer of Neiman Marcus Group, last year moved to New York where the retailer has always had an office.

Neiman Marcus in August hired Ryan Ross to fill a new job as president. Ross came from Williams Sonoma and lives in Dallas. He reports to van Raemdonck. Chief financial officer Kate Anderson joined the company early last year and lives in California.

International growth

Neiman Marcus hit $5 billion in revenue last year and, while sales aren’t expected to grow at the same pace as last year, there is a big potential for new revenue from international shoppers online.

London-based online luxury retailer Farfetch last year invested $200 million in Neiman Marcus and became a minority owner.

It has a platform that will allow Bergdorf Goodman, well known to international luxury shoppers who visit New York, to reach shoppers worldwide. The upgrades will allow for purchases to be made in other currencies and customer service provided in multiple languages.

“The Bergdorf Goodman brand is bigger than the business to date with one location in New York, but the business could be and should be global,” van Raemdonck said during a keynote speech at the National Retail Federation’s annual gathering in New York last week.

CORRECTION, 8:37 a.m., Jan. 23, 2023: An earlier version of this story incorrectly said the new bar in the Atlanta store was complimentary. It isn’t, but some may be as stores are remodeled. Also, Ross reports to van Raemdonck, not Todorovich, which the earlier story said.

Twitter: @MariaHalkias

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