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How Neiman Marcus CEO is riding the luxury pandemic boom to rebuild post-bankruptcy

February 10, 2022, 4:22 PM UTC

Neiman Marcus is going back to basics in a bid to reinvent itself amid a high-end spending boom: It‘s doubling down on the kinds of goods and high-touch services that have made the retailer synonymous with a luxury lifestyle for more than a century.

The upscale department store—long known for $5,000 Brioni suits, $8,000 evening gowns, and the occasional $300,000 bracelet—is focusing more intently on splashy, premium products both in stores and online. This pivot comes at a time when some of its rivals, notably Saks and Nordstrom, are casting a wider net for customers in pursuit of growth, just as Neiman had for years before landing in bankruptcy protection in 2020.

For Neiman Marcus Group CEO Geoffroy van Raemdonck, zeroing in on the needs of the retailer’s core well-heeled clientele has helped reassert its authority in the hypercompetitive world of expensive clothing and accessories. That means delivering on the white-glove service that the affluent expect, but with a modern twist that’s adapted to the customer-first e-commerce era, such as fitting rooms in which customers can request clothing in another size through an app, or receive a stylist’s suggestions via text when new items arrive in store.

It might sound obvious that Neiman Marcus, the go-to store for ladies who lunch and debutantes, would define itself as a luxury player. But it’s been distracted over the past decade by, among other things, the expansion of its discount chain Last Call, all while choking on debt and failing to lure younger shoppers. Not anymore, the CEO pledges.

“Neiman is really focused on the luxury customer,” van Raemdonck tells Fortune. “It’s the niche we’ve occupied for the last 100-plus years.”

Van Raemdonck took the reins four years ago after stints at Ralph Lauren, Louis Vuitton, and Boston Consulting Group. But his revitalization efforts at Neiman have since been hindered by its crippling $5 billion debt, roughly the same amount as the retailer’s peak revenue in 2015.

The company has spent hundreds of millions of dollars paying down interest—money that could be better spent on building or buying state-of-the-art e-commerce and in-store tech to keep up with competitors like Nordstrom and Farfetch. With unsustainable finances pre-COVID, the pandemic’s arrival pushed Neiman into bankruptcy in May 2020. About four months later, it emerged from bankruptcy court when a group of investors including Pimco, Davidson Kempner Capital Management, and Sixth Street Partners, bought the department store chain.

Now, post-bankruptcy, Neiman’s finances are on sounder footing, with debt at a far more manageable $1 billion and sales on the rebound. The Dallas Morning News in December reported that the privately held company’s first fiscal quarter revenue rose 39% year over year to $979 million in the period ended Oct. 30, 2021. That’s still below its total revenue for the same quarter the previous year, partly owing to the shuttering of four Neiman Marcus stores, including its ill-fated Manhattan location. But comparable sales, which exclude newly closed or opened stores, rose 7.3% over levels in the same quarter two fiscal years earlier, showing that existing stores and its website are recovering from the pandemic hit. The company declined to comment on these numbers.

Still, the changing financial tide has freed Neiman to embark on a $600 million, three-year spending plan. Much of that capital is allocated to new tech tools that it hopes will allow its 3,000 store workers to provide high-touch services in stores and through e-commerce. “Luxury is a considered purchase,” van Raemdonck says.

To that end, Neiman recently bought Stylyze, a machine learning platform that helps retailers enhance their digital experience. With this feature and other new technology, sales associates can better track customers’ past purchases and provide tailored product recommendations. Neiman has also added Fashionphile resale shops to its stores, in an effort to establish its foothold in the secondhand luxe goods market that younger, moneyed shoppers gravitate toward.

“We were really hindered by our balance sheet, and now we have this agility and flexibility to invest in capturing more than our fair share of the growth of luxury,” van Raemdonck says.

About $250 million will go toward upgrading its 37 stores, including the Neiman-owned Bergdorf Goodman, with the addition of new in-store restaurants and bars, revamped fitting rooms, a new order management system, and improvements to its distribution facilities.


Newfound wealth, driven by tech stocks and the cryptocurrency boom, has helped the luxury market stage a big comeback after the worst of the pandemic, something van Raemdonck says he is seeing firsthand. In November, Bain & Co. estimated the U.S. would supplant China as the top luxury market in the world and that sales of personal luxury goods in the Americas, primarily in the U.S., would rise 40% in 2021, led by shoes and handbags.

As Neiman stakes its claim in the luxury market yet again, it’s competing with aggressive rivals like Nordstrom and Saks, as well as the very luxury brands it sells, many of which are expanding their brick-and-mortar stores and beefing up their online presence. Neiman is countering by adding 130 brands to its assortment, including 50 it says are exclusive to Neiman. They include exclusive sneakers by HypeBeast and Piferi luxury vegan shoes.

With his eye on a return to ritziness, van Raemdonck has no regrets about closing all but five of Neiman’s 29 Last Call stores directly before the pandemic’s onset. The theory had long been that Last Call, on top of ridding Neiman of unsold, out of season inventory, offered less affluent shoppers a taste of “Neiman lite,” enticing the next generation of shoppers. Not so, the CEO says. “We never demonstrated that the Last Call customer was migrating to Neiman Marcus.” Nordstrom is similarly struggling with its Rack business, and competing with the likes of T.J. Maxx in the so called off-price retail world is difficult and distracting.


Nordstrom and Saks have added a wider assortment of inexpensive items to their websites, with Nordstrom going so far as to say it wants to quintuple the amount of items it sells online. That’s a nonstarter for Neiman, van Raemdonck says. Nor will he follow in Saks’s footsteps and split its physical stores and e-commerce into separate corporate entities, the latter of which generates about one-third of Neiman’s revenue. (Other retailers, including Macy’s and Kohl’s, are also facing investor pressure to consider a similar move.)

“I think a lot of those separations are driven more by financial engineering than they are by the core business rationale of better service for the customer,” van Raemdonck says. What’s more, he doesn’t want to imperil the integration of stores and e-commerce, which is essential to Neiman prospering. The Belgian-born CEO says a Neiman customer who shops in-store and online generates 4.5 times the revenue of one who spends in only one avenue.

Nevertheless, this is not Neiman’s first attempt at modernizing itself and attracting younger shoppers. Previous tries include a short-lived partnership with Rent the Runway and several experiments using tech to link shoppers with store stylists. Neither have yet to fully deliver on their promise, but van Raemdonck says newer Neiman shoppers are six years younger than recruits it won over in years past.

In essence, the influx of newly wealthy consumers means an entirely new customer base is up for grabs. It’s now up to the 115-year-old grande dame of luxury to win that younger shopper.

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