NEW YORK — Neiman Marcus Inc., despite 375 layoffs this week and sharp December declines, isn’t being stopped cold by the recession, according to chairman and chief executive Burt Tansky.
“We are all working very hard on the creative side and trying to put together new ideas to bring customers back,” Tansky said Wednesday at the conclusion of the National Retail Federation’s annual convention and expo, which ran for four days at the Jacob K. Javits Convention Center here. The central team of the Dallas-based luxury chain, as well as staff at store level, are being enlisted to “think out of the box” to devise new ways to lure customers, Tansky said, adding the initiative is happening even as the business is “under stress.”
“We have to restore sales and get customers back in the stores,” said Tansky.
He was part of a panel discussion on “inspired leadership” that included Roger Farah, president and chief operating officer of Polo Ralph Lauren Corp.; Kip Tindell, chairman and ceo of The Container Store Inc., and Bobbie Lenga, managing director of Russell Reynolds Associates Inc.
Tansky said Neiman’s is working on a number of new marketing ideas to get the affluent customer to the stores, including more intimate special events targeting groups of 20 to 30 people throughout the 40-unit chain. “We have customers who are very uncomfortable shopping ostentatiously in this environment,” Tansky said. The strategy is “to change the tide by focusing on our best customers on a day-in, day-out basis.”
He did not detail the nature of the new marketing or special events, but it’s possible Neiman’s could try to bring in the best-customer groups at special hours so shopping is more discrete and intimate, or resort to past formats, such as trunk shows, designer or celebrity appearances, entertainment, lunches, charity tie-ins or various shopping rewards. More friends-and-family nights or other such discount-driven promotions are probably not in line. “The whole idea of more and more markdowns is not the answer — it’s hell,” Tansky stated.
On a positive note, Tansky said it’s an exciting part of the job trying to get customers back into the stores and to transform the store environments “to when shopping was joy.”
“It’s not that anyone is trading down. It’s that they are buying less,” Tansky said, reiterating a theme he’s conveyed before.
Polo Ralph Lauren also has initiatives under way to stimulate business in these hard times. Farah cited a strategy whereby the top 100 people in the company are being asked to develop seven ideas to advance the company. Farah said this was an opportunity to engage the organization in advancing the company by getting broad-based and bottom-up support. “We didn’t necessarily take pyramid heads” to formulate the initiatives. He declined to say what the seven initiatives are, but did say some would have short-term impact and others would be more long-term.
On the question of what defines good leadership, Tindell said: “Communication is leadership. Leadership is communication. That’s a real mantra” at The Container Store. “If our sales fall to a certain level, people will know what we have to do.” Communicating is “a good opportunity to make employees feel a part of things.”
“These are unprecedented times,” said Farah. But despite the uncertainties, “you have to plan and you have to make some assumptions and adjust the plan if it is off. You may have to alter priorities, but you must be able to communicate why you are altering” the plans or priorities.
Tansky said the current severe climate “requires us to call up every leadership strength. You have to remain positive. You have to keep the team focused. We have to stay calm and not panic.…You have to be agile, move quickly.” He agreed that one of the most important things a leader can do in hard times is communicate, and he noted that frequent meetings are held throughout Neiman’s to talk about strategic and tactical positioning.
The panelists agreed that a down cycle is no time to rebrand.
“The brand is paramount,” Farah said. “We do not in any way take the brand in a different direction. After 40 years of building it, we are not going to let a downturn take it in a different direction.”
Said Tansky, “These events are not a signal to change. You don’t spend that much time developing a brand and then change because of a crisis.” There’s a “competitive landscape” and the temptation is to change, Tansky noted. On Monday, at the Financo forum, department stores, particularly the luxury department store model, was challenged by Millard “Mickey” Drexler, chairman and ceo of J. Crew Group. Tansky defended his business, saying the affluent will return to the stores with an open wallet, but acknowledged there’s uncertainty as to when.
On Wednesday, he seemed to be defending the business again, stating, “We have persisted. We have no intentions of changing. We know who we are. There is no discussion whatsoever about changing what the brand is. It’s just not in the cards.”�
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