Geoffroy van Raemdonck, the new chief executive officer of the Neiman Marcus Group, is no stranger to a tough business challenge.
Though he’s never been a retail ceo before and he’s only 46, he’s got experience navigating luxury businesses through troubled waters. As Ralph Lauren’s group president for Europe, Middle East and Africa from 2014 through 2017 — a period of earnings declines and turnaround efforts — he was involved in redirecting the distribution to the best stores with the most relevant products and getting the Ralph Lauren brand selling on third-party web sites. Earlier, he was on the team that helped guide Louis Vuitton through the Great Recession, holding different senior-level jobs including president, South Europe; and acting president, North America. And at Express, his first job in fashion retailing, he helped restore profitability by leading a revival of the pants business as vice president of brand development.
“I have not done a turnaround where we needed to go down to go back up. I’m more of a change agent, transforming businesses to adjust to the opportunities in the market,” van Raemdonck told WWD.
Now he faces perhaps his biggest challenge, returning the $4.7 billion Neiman Marcus to its dominant position as America’s leading luxury retailer. He’s got to strengthen ties to designers to amp up exclusivity while extending the appeal to more customers — not to mention to potential buyers of the entire company. Last year, NMG was pulled off the selling block by owners Ares Management LLC and the Canada Pension Plan Investment Board, which together bought the business for $6 billion in 2013, bringing long-term debt up to $4.4 billion. “Our next debt maturity [term loan] is not until calendar year 2020. Our long-term debt does not fully mature until 2021. We will continue to proactively manage our liquidity and capital structure,” he said.
In his first interview since he succeeded Karen Katz as NMG’s ceo on Feb. 12, van Raemdonck said he will be “relentlessly building a bold innovation agenda and testing agenda” and that he’ll be encouraging everybody in the company, regardless of the job, to offer ideas to innovate the business. He also cited the possibility that the company might broaden its assortment beyond the current categories sold, and for international expansion apart from the Neiman’s-owned Mytheresa luxury web site in Munich.
“If you want to know my priorities right now, they’re to exceed our plan for Q3 and Q4, to continue on all the initiatives we have that drive growth, to drive our Digital First focus, and double down on any innovative ideas we have that we can test,” van Raemdonck said. “We have multiple tests that are in the works and that we will be putting into the works. They are all linked to the consumer experience and how we remove friction” associated with shopping the stores and online. “I’m sure some will prove successful and lead to a full rollout. We have a list of tests. Some are really big, some are small.
“The key element is fostering a culture where people bring new ideas and then we test and we learn. I am a believer in fail fast, fail once. Frankly, if you fail, it’s not the end of the world. One door gets closed and another door is opened. The key is quickly arriving at the answer. You don’t need a perfect batting average. You just have to be testing ideas and doubling down on what works.
“There are two elements — creating a belief system that innovation is important and that we embrace change, and then putting a mechanism in place” with the aid of technology, he continued. “I have invited anyone to send me or the other leaders e-mails with ideas. I received like 40 in three days. Right now we have an innovation lab that screens these, but we need it to be democratic with access so everyone has the opportunity to share ideas, and then we need a structure” to vet the ideas.
He dispelled notions that Neiman’s skews mostly to more mature customers, explaining that about 50 percent of its consumer base are Gen Xers and Millennials. “We will focus on serving them better and better. Each group and age doesn’t necessarily go with a certain behavior,” he said. “Today you have consumers who want to have a very high-touch experience in stores and you have people who don’t want a high-touch experience in the stores” and the same is true for those shopping online, he added. “So we have an opportunity to really differentiate our experience based on what the consumer needs. There is no one size fits all. We need to have different ways to leverage technology to help customize the experience. It’s all about customization and personalization.
“We’ve got the right to win because we offer a curated luxury assortment — and maybe we’ll expand to other categories and other experiences,” van Raemdonck said. “We have the right to win because we offer an omnichannel experience which very few [competitors] offer the way we do. A third of our sales are online.” That compares to other department stores and specialty chains generally in the 20 percent range or less.
“We know 85 percent of our consumers start their journey online and that consumers that shop Neiman’s both online and offline spend four times more than those who experience it one way or another. It tells me that we really engender their loyalty when we do a good job at delighting them both ways.” Nowadays, “Your proposition needs to be more compelling. We are seeing our top customers remaining extremely loyal but the challenge of earning loyalty is clearly one where the standard is increasing.”
It’s also about understanding luxury designers and brands and their changing needs. “If you look at the top 20 [designers or brands] at Neiman Marcus, I must know 75 percent of them,” van Raemdonck said. “That is a great starting point.”
As an experienced vertically integrated brand leader, “I know what they are trying to achieve and I want us to be their partner, to tell their brand story and reach a new customer. All the brands now have new leaders or new designers. They are repositioning themselves. Given our reach to probably the highest-quality luxury customer in America, we can help them deliver a new vision. I really want to partner with them in terms of exclusives, original content, pop-up stores. There are so many things we can do strategically with them so they reach a consumer they don’t have.”
In his first two weeks of running NMG, van Raemdonck met with the 133 officers of the company, those at the vice president level or higher. He’s held meetings with Neiman’s “shadow council,” which is a group of 15 emerging leaders, and he had breakfast with the leadership of Bergdorf Goodman and toured the two Bergdorf stores. He’s said to be close to picking a president of Bergdorf’s. The position has been vacant since Joshua Schulman joined Coach a year ago.
So far, van Raemdonck has visited 12 Neiman Marcus stores in a month’s time. He altered his schedule to visit those in Boca Raton and Ft. Lauderdale, Fla., following the mass shooting at Marjory Stoneman Douglas High School in Parkland, Fla., where 17 people were killed and 15 more were hospitalized. Some Neiman’s employees knew people affected by the tragedy. “It was such an important moment for me to say that as a company we are there to support them and thank them. We have seen people shopping again, but the spirits are forever affected,” he said.
He has been to Paris for runway shows and market appointments, and also conducted Neiman’s first live conference call that was open to 14,000 associates. “My ask to everyone was to please look at the company with fresh eyes. We will never change the essence of what makes Neiman Marcus magical, but we will change how we deliver the magic and I ask everyone to step up in bringing ideas.”
In a more public sense, van Raemdonck’s coming out is Friday, when he participates in the conference call covering NMG’s fiscal second quarter.
At a recent visit to the Neiman’s store under construction at Hudson Yards on the west side of Manhattan, van Raemdonck wore a Ralph Lauren pinstripe suit, Charvet shirt, Louis Vuitton tie and Zegna slip-on sneakers that made it easier to negotiate the dirt and debris on the site. “The sole is very soft and once you get your foot in, it stays there,” he said, before segueing into how the sneaker category has exploded into upscale fashion, and is infiltrating his wardrobe.
Personally, he’s not partial to any particular brand or manner of dressing. “I love fashion and beautiful products. I don’t have a style. It really depends on the mood. It depends on the end use. Right now, I am very much into the mix of the casual and the non-casual. I just bought made-to-order boots with exotic skin. I have to say Diane von Furstenberg is the one who told me I had to buy boots. So I bought them. It felt different. It felt that I had arrived in Texas. These days we all have permission to delight ourselves, to experiment. I want to expand the reach of what I wear and how I wear it.”
When not working, van Raemdonck enjoys sailing, skiing, food and wine. “I love Burgundy wine and I am very excited to be back in the U.S. to try all the pinot noirs.” He’s also into horseback riding. “I’m going to learn to ride Western-style versus British. That is super exciting.”
A native of Brussels, van Raemdonck is married to interior designer Alvise Orsini and has two-year-old twin boys. In addition to Europe, in the U.S. he’s lived on both coasts and in the Midwest, and now he’s living in the South for the first time, in Dallas where Neiman’s is based.
“I am highly adaptable and I am super excited to discover another part of the U.S. Part of the buying those boots was to embrace the culture…I was born European but I chose to become American. It defines me and what I bring to the business — an appreciation of luxury from Europe from the standpoint of the business of retailing.”
Van Raemdonck began his career with the Boston Consulting Group working with consumer and brand-driven companies for nearly a decade in its New York, Chicago, Paris and Brussels offices.
At Express, as a source said, “He really drove the whole commercialization of pants from the design to the stores, making sure everyone was focused on pants and to make it the most innovative business, literally overseeing all the functions. Pants drive the most loyalty.”
His next job was at L Brands, where he was responsible for two new businesses, Victoria’s Secret Sport and Bath & Body Works Home Fragrance. He was trained as a “consumer merchant” by Leslie H. Wexner, chairman and ceo of L Brands. “From him, two things struck me — that curiosity keeps you relevant in the market, and on a personal basis it keeps you young,” van Raemdonck said. “You constantly need to look at things and say can we do it better than the trend of today.
“The second thing he taught me is that as an individual and a leader, you must make sure you are passionate and that your teams are passionate because that’s how the best ideas emerge. These are Les Wexner’s firm beliefs. He constantly embodies them and they have become something that is fundamentally part of my own value system today.”
He eventually joined Louis Vuitton. “That’s where I learned to appreciate what it is to drive an iconic luxury brand and how to communicate all the elements of the brand DNA in a modern and relevant way. It’s a big idea and the big idea was tested when I joined in 2008 when the [Great Recession] happened and the Dow Jones went down to 6,000.” Vuitton launched a new campaign with Sean Connery, Angelina Jolie and other celebrities, basically conveying that a Vuitton bag is a work of art, a companion for a woman, something that could make her feel as van Raemdonck said, “beautiful, secure, confident,” and represent more than mere fashion accessory. “It becomes part of the woman,” he said.
During the economic downturn, Vuitton kept selling at full price, while other brands were ferociously marking down. “The brand has never gone on sale and our recommendation was to keep it that way,” recalled van Raemdonck. “We never questioned that decision. People believed that if it is full-price there is a scarcity attached to it, and that it warrants it because of the quality that goes into the product and the integrity of the brand.”
After Vuitton, van Raemdonck became ceo of St. John Knits International for a year, where he revamped the collection to focus on knits and improved the business. “The main lesson was that for an organization to succeed they need to have confidence in their abilities and to be clear on the core of their DNA and the brand heritage,” he said. “Once you have that, you can dream of the future. But as a leader it’s very important to quickly instill confidence that we can win.”
His most recent job, Ralph Lauren’s group president for Europe, the Middle East, Africa and global travel retail, entailed “figuring out how you distribute your brand to your target consumer in the most qualitative and least discounted manner. That was a transformation in part. We had to rethink every element.”
He’s evolved into what he called “a servant leader at the service of the organization. By that I mean that I am charting the course and the vision with the leadership team and the input of everyone. I want to foster innovation at every level of the organization.
“I am a servant leader who really builds a culture of performance and accountability, where we deliver on our plans,” van Raemdonck said. “And I want to remove any roadblocks to empowering people to be at their best. In today’s environment, that’s how you attract the best talent and that’s how you retain it.”