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NEW YORK — Neiman Marcus Stores has filled its top slot at last.
This story first appeared in the December 3, 2002 issue of WWD. Subscribe Today.
On Monday, Neiman’s veteran Karen Katz was named president and chief executive of the stores division, in a broadening of the top job at the $2.2 billion luxury specialty chain.
As ceo, Katz takes on responsibilities for merchandising, stores, distribution, marketing and advertising, and succeeds Burt Tansky, who continues as president and ceo of the parent Neiman Marcus Group. She reports to Tansky.
As president, Katz also takes on the operational responsibilities that were held by Gerald Sampson, who retired last month. Katz had been president and ceo of the $450 million Neiman Marcus Direct operation.
In recent weeks, there was speculation that Katz would be promoted and run the much-larger stores division, for several reasons. She’s worked at Neiman’s for 17 years; has a wide range of experience at the company as a merchant, store manager and in the direct-to-consumer businesses, and has been promoted by Tansky several times in the past.
At NM Direct, Katz is credited with trading up and focusing the Neiman’s catalog to mimic Neiman’s stores, cutting expenses, and heightening the profile and product range of the Horchow home furnishings catalog. She also simplified Neiman’s Web site, eliminating a lot of the bells and whistles so products stand out better. NM Direct also operates the Chef’s kitchen equipment catalog
Before running the direct businesses, Katz was executive vice president of stores.
The 45-year-old Katz, a native of Dallas and mother of a 13-year-old son, would now have to be considered a primary candidate to one day succeed Tansky in the corporate role. Tansky turns 65 next month, but the Dallas-based Neiman Marcus Group has no mandatory retirement policy, and people close to Tansky say he has no desire to retire soon, even though he has family in the New York area. They say he thoroughly loves running Neiman’s, has a reputation for being very hands on, and is expected to continue to work very closely as a mentor for Katz. Tansky took on the stores’ ceo role two years ago, after Hugh Mullins abruptly departed. Tansky always acknowledged that Mullins would be replaced, though it took some time to determine a successor who, in the end, came from within the company.
“This has got to be one of the best jobs in retailing,” said Katz. “If you are going to be in this business, you may as well be buying and selling the best of the best in terms of the merchandise, and catering to an incredible, wonderful customer base.
“Always these kind of promotions are a surprise when they actually happen, but I’ve known about it for a little bit,” she added.
Last month, when asked to comment on speculation that Katz would be promoted to ceo of NM Stores, Tansky denied it. Apparently, he either changed his mind or hadn’t worked out the details of Katz’s assignment at that time.
“Karen Katz was on Burt Tansky’s radar screen for a long time,” said Hal Reiter, chief executive of Herbert Mines Associates search firm. “She’s a well-rounded executive.”
“This should be a seamless transition,” Tansky said Monday. “Karen has a very, very strong base of experience here. For the last two years, she has been running and restrategizing Neiman Marcus Direct and has done a fine job. There are always opportunities and challenges on the road ahead. Karen will be challenged to keep the momentum going at Neiman Marcus.”
Tansky added that a new ceo of Neiman Marcus Direct will be named “in a very short period of time.” Neiman’s seems inclined to go with internal candidates and has a reputation for hanging onto its executives, even though its compensation packages are said to be less generous than those of comparable retailers.
Growth for Neiman’s will be a major challenge, considering it already operates large units in most of the U.S. markets that can support a high-end designer retail business. The company has been trying to find a site for what would be its first store on Long Island and is considering the Oyster Bay area.
Also, the luxury sector has dipped in the last two years, after about a decade of solid growth, though this fall, luxury stores have noticed a slight pickup. For the year ended last Aug. 3, Neiman Marcus Group’s revenues declined to $2.95 billion compared with $3.02 billion for fiscal year 2001. Net earnings for fiscal year 2002 were $100 million, compared with $107 million the year before. Neiman Marcus Group is the parent corporation of NM Stores, NM Direct, Bergdorf Goodman, Kate Spade and Laura Mercier.
Asked how she plans to grow the division, Katz replied, “I’m always optimistic about the future, but I’m not in a position to talk about that, since I’ve only been in this job for about an hour. We’ve had tremendous growth over a number of years,” she said, pinpointing fine apparel, beauty, handbags and shoes. The key to the future, she said, “is trying to figure out what are the next segments of the business to grow.”
Another opportunity for growth will be the continued leveraging of the catalog businesses off the e-commerce operation. “The future for that looks very bright,” Katz said.
Neiman’s also has a strategy to invest in small, emerging companies, though Tansky said he would continue to lead that effort, despite the fact that the company has not made an investment since 1999, when it bought a majority interest in Kate Spade. The year before, Neiman’s bought a majority interest in the Laura Mercier cosmetics firm. Tansky recently said he’s continuing to search for additional investments.
Katz joins the small group of women leading a major retail chain. The growing club includes Vanessa Castagna of J.C. Penney stores, catalog and online operations; Christina Johnson, of Saks Fifth Avenue Enterprises; Jane Elfers of Lord & Taylor; Dorritt Bern of Charming Shoppes; Grace Nichols of Victoria’s Secret; Beth Pritchard of Bath & Body Works; Susan Kronick, group president of Federated Department Stores, and Helene Fortunoff of Fortunoff’s.
Commenting on her new membership in that elite club, Katz said, “I guess you have to think about it. These women have been good role models for the rest of us.”