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The Neiman Marcus Group Inc. has formed an office of the chairman, throwing the spotlight on two veteran officials, Karen Katz and James Skinner, as leading contenders to one day succeed Burt Tansky, chairman, chief executive officer and president of the corporation.
Katz continues as president and ceo of Neiman Marcus Stores, but as part of the just-formed chairman’s office she has the additional role of executive vice president of the group, entailing new responsibilities for strategy, business development and marketing.
Skinner, senior vice president and chief financial officer, who is also included in the office of the chairman, has been promoted to executive vice president and chief financial officer of the group, with additional responsibility for information services.
Both executives continue to report to Tansky, the third member of the office.
“We’re creating a brain trust,” said Tansky in an exclusive interview with WWD on Monday.
Asked if creating the chairman’s office was part of a succession strategy, Tansky replied: “I don’t know that. We are creating a different kind of structure at the top and that’s it. Karen and Jim are continuing to do what they are doing and they take on some additional responsibility. They join me in setting corporate policy and strategic direction. That’s it. There’s nothing more to it. We are not changing our strategy. This is merely a way of recognizing two people’s performance, which has been outstanding, and giving them more responsibility.”
Ironically, Tansky added the title of executive vice president of NMG in 2000 when he was already president and ceo of Neiman Marcus Stores. A year later, he rose to chairman, ceo and president of the group.
There has been widespread speculation that NMG, which Texas Pacific and Warburg Pincus bought in 2005 for $5.1 billion, could go public early next year via an initial public offering. The $4.4 billion company has been on a roll for years, and the luxury sector is generally holding up despite the nation’s economic uncertainties stemming from the housing slump, credit crunch and rising fuel costs. The stock market and Wall Street bonuses have also abetted luxury sales, but both are less certain this year. Still, Neiman’s has been able to weather both good and bad times in the economy.
This story first appeared in the October 30, 2007 issue of WWD. Subscribe Today.
The new office of the chairman sends a signal to Wall Street that Neiman’s is a company with bench strength and seasoned executives who have been with the Dallas-based group for many years and could fill Tansky’s shoes. Katz seems the most likely successor to Tansky, considering she’s a merchant running the namesake and biggest division, Neiman Marcus Stores, which this year is marking its centenary.
However, retail sources said not to count out Skinner, a financial executive, even though the track record for financial or operations executives running a fashion retailer has not been good. Gap and Sears are two examples of companies that faltered with non-merchants at the helm. It’s also possible Neiman’s taps an outsider to succeed Tansky, though it’s more his style and the recent history of the company to promote from within. Furthermore, there’s a dearth of talent in retailing generally, and a very limited field of candidates with sufficient experience in the luxury retail arena who would even be considered. If Skinner were picked, he would still have merchants running all of his divisions to lean on, and if Katz were picked, Wall Street would feel comfortable knowing a strong financial executive is at her side.
Other top merchants at the group include Jim Gold, president and ceo of Bergdorf Goodman, and Brendan Hoffman, president and ceo of Neiman Marcus Direct. Like Katz and Skinner, Gold and Hoffman report to Tansky.
The 69-year-old Tansky has a contract taking him through October 2008 as ceo, and 2010 as chairman. It is possible the contract could be extended, but next fall would seem an opportune time for him to retire or at least relinquish at least part of his stewardship. Leaving in a year could still give him time to help guide the company through the early days of an IPO, and leave the company on a high note.
Asked about retiring, Tansky only said, “I don’t think about those things.” He is credited with keeping Neiman’s sharply focused on luxury, productivity increases and building designer relationships and steady, but not overly aggressive, store growth.
The new hierarchy does shift some of the reporting structure off his shoulders and onto Katz and Skinner. Steven Dennis, senior vice president of strategy, business development and marketing, will report to Katz and no longer reports to Tansky. Also, Phil Maxwell, senior vice president and chief information officer, will report to Skinner, after previously reporting to Tansky.
“Karen and Jim have demonstrated outstanding leadership capabilities, exceptional performance and an unrelenting focus on performance,” Tansky said in a statement. “Their promotions will provide them with development opportunities that will help prepare them for broader responsibilities as we grow.”
Tansky spent the first half of his career in mainstream department stores and entered the luxury arena in 1974 when he joined I. Magnin as a senior vice president. He later joined Saks Fifth Avenue as a merchandise manager and rose to president and, in 1990, became ceo of Bergdorf’s. In 1994, he moved to Dallas as president and ceo of Neiman Marcus Stores, before rising to executive vice president of NMG and ultimately chairman, ceo and president in 2001.
After working at Foley’s, Katz joined Neiman’s in 1985 as assistant store manager of the Houston unit, and has experience across many sides of the business, from overseeing stores, to running direct, and even once serving as a divisional merchandise manager of handbags.
Skinner joined the Neiman Marcus Group as senior vice president and chief financial officer in June 2001.
Previously, he served as senior vice president and chief financial officer of CapRock Communications Corp., an integrated telecommunications company and, earlier, executive vice president and chief financial officer for CompUSA Inc., and was also a partner with Ernst & Young.