Geoffroy van Raemdonck, chief executive officer of the Neiman Marcus Group, is changing the culture at the company he runs.
It’s a culture of inclusion, diversity and belonging, which van Raemdonck metaphorically refers to as “love.”
“This notion of love, it unites all of us at Neiman Marcus Group,” van Raemdonck said at the WWD Apparel and Retail CEO Summit during a conversation with WWD’s editorial director James Fallon. “We live in a world of transactions. We live in this world of clicks, and that is not what luxury is about. Luxury is an emotion — we chose love as the one that unites us. It is really embedded in our culture, which is really what fuels our success.
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“We want to be a company where everyone belongs,” van Raemdonck said. “Where everyone is expected to show up as their true self,” which is particularly important for an organization that is led by a member of the LGBTQ community, has a majority of women in its ranks, and was cofounded by a woman, by Carrie Marcus Neiman, along with her brother Herbert Marcus, and her husband, Al Neiman.
In an organization where there’s diversity of thought and people of diverse backgrounds, “You are much more prepared to revolutionize luxury and luxury experiences, which is what we are setting out to do,” van Raemdonck said.
Neiman’s new culture recognizes that people are different and lead different lives, van Raemdonck suggested. “At the end of the day, what we want from them is to perform and deliver impact. But we don’t expect them to live in Dallas [Texas, where NMG is based] or in New York, or to be in the office every day. We expect them to deliver impact.”
Forbes this year ranked NMG as one of the best places for women to work, and the Human Rights Campaign characterized the group as the “Best Place to Work for LGBTQ+ Equality.”
“Being an employer of choice is the best reassurance I have that we will do well next year and the years to come, because at the end of the day, we’re in the business of having people who bring love to our customers, brand partners or associates in our communities,” Van Raemdonck said.
The change in the culture has brought personnel changes.
“We constantly look to make additions — people who bring best practices from other companies and help us continuously practice our growth mind-set,” the CEO said. “We recently added a new position, a president for the Neiman Marcus brand, Ryan Ross,” who has extensive experience in digital and integrated retail and was formerly president of Williams-Sonoma.
The team is “gelling,” van Raemdonck added, “because it’s united in purpose, because we all have different backgrounds and because it’s very rich” in its composition.
For many years, NMG struggled managing an overload of debt until it went bankrupt in 2020, restructured and got new owners through an exchange of debt for equity. With a healthier balance sheet, NMG could finally invest in the business again, with technology becoming a priority.
“In my mind, technology and data allow us to scale that love,” van Raemdonck said. “And by that I mean reach more customers and personalize the experience.”
Van Raemdonck cited investments in NMG’s clienteling tool Connect, which allows sales associates to communicate with customers 24/7 in different ways; Farfetch to scale bergdorfgoodman.com globally, and the acquisition of Stylize, and machine learning to enable personalization in styling based on what has been bought or browsed over. He also said Neiman’s is relaunching its app, investing in the supply chain and warehouses to scale and allocate the inventory better.
He said this year, a program of “retail-tainment” was launched at Neiman’s, involving staging “immersive, multisensory experiences in the stores in partnership with leading brands and designers providing exclusive merchandise.
Two percent of NMG’s customers generate 40 percent of the revenues, spending more than $25,000 a year, and 90 percent of those customers are retained year-over-year. “That is the relationship we cherish,” van Raemdonck said.
“The brands that are really important for us are the true luxury brands because we really focus on that true luxury customer,” said van Raemdonck, adding that NMG’s top 20 brands represent almost 50 percent of sales.
“Our customers are looking for the most established brands that have the highest integrity and have been around for a long time. But they’re also looking for something that is emerging, something that is fashion and that’s where our merchants come into play, to really curate the new brands.
“The expansion of distribution is very important. So last year, we expanded the top luxury brands by 600 points of distribution in our 37 stores. And we added 200 emerging brands. A very important part of our role in the industry is to give a chance to great creative people.”
Customers that form relationships with a Neiman’s sales associate spend 12 times more than those who don’t. “And so the path to really being in a relationship with us is this integrated retail when we are available to the customer at any time. During COVID-19, with all our customers, if there was ever a barrier to buy online, that barrier was broken. They’ve practiced it. They go more online. They engage with our sales associate remotely.
“But what we’ve also seen is that the store is more important than ever. Eighty percent of our stores have performed at the highest watermark,” van Raemdonck added.
Recently, the company has been experiencing mid- to high-single-digit growth compared to last year. “It’s growth on growth.” Heading into the holiday season, van Raemdonck said he’s “cautiously optimistic” because customers are socializing and traveling again, feel more confident about their health, and because of that have reasons to shop.
“We [are] also seeing that there’s a younger customer…now shopping with us. We see a big influx of men. And that is a new customer. And so overall, I’m very confident because we have more customers. And the customers we see really want newness. They want to engage in luxury, we are seeing a little bit of a normalization and deceleration with the new customer,” as disposable income gets diverted more to activities like travel or dining out, and to some degree away from fashion. “But the sign that I really look at is the customers who came last year how many of those came back two or three times? And that’s what’s fueling our growth right now.”
With the nation’s labor shortage, van Raemdonck acknowledged that it’s been challenging to find staff, but not as challenging to retain people. He said the company seeks talent from both inside and outside of the industry, equips them with digital tools to support their selling, product knowledge and building relationships with clients, and provides mentorship.
“Retention compared to pre-COVID-19 is up 20 percent. Employee NPS [net promoter score] is up 34 points. I think it’s all the effort we’ve done to find people and to enable them to be their best. And ultimately, people are measured on their impact.
“We’ve not faced a retention problem. It’s been difficult to actually find the right people who can really appreciate the strength of a relationship.”
Asked what NMG is doing to upgrade stores, van Raemdonck replied that “consumers always expect the store experience to be better so we are investing tremendously, more than $200 million,” in Bergdorf’s and Neiman’s stores.
At Bergdorf’s during the pandemic, van Raemdonck said there was much reshuffling of brands, adding brands and giving more space to the brands that are really vibrant.
At Neiman’s, the top 10 stores will see upgrades involving displays, pop-ups, activations, new restaurants, more lounges, more experiential services like spas, and then it involves “reflowing” the merchandise to capitalize more on trending brands and categories. “We need to make sure that there’s more space given to the men’s business. We need to make sure that there’s more space to some categories. And then as we add new brands, that also requires re-spacing.”
Asked how NMG buyers determine what brands to bring into the mix, van Raemdonck replied, “We brought 200 brands in over the last 12 months. The teams are empowered to really go with what they believe is best. And a big part of that is intuition.
“We’ve actually folded our fashion office to be within the merchant group so that the person who’s recognizing the trend is also the person who can make the real investment, and take a stand behind a brand or a category or a trend. Then she can actually immediately go and buy.” So a strong connection was made between those that discover brands with potential or are already on the rise with those that actually have the power of the purse, van Raemdonck explained.
“The other thing we did is we used to hold everyone accountable to a certain level of profitability,” the CEO added. “It’s about taking a chance on a brand that has enough proof point that we are convinced, but doesn’t yet have the history,” or sales track record.
“We do mapping by category, by silhouette, by price point. There’s a lot of data the merchants get,” van Raemdonck said. But at the end of the day, “Your intuition tells you [whether] this is the next big thing. We have a history of doing this. Tom Ford started with us. With a lot of other brands like Christian Louboutin, Brunello Cucinelli, we really played a key role early on in their expansion in the U.S. or global expansion. And today, they are some of our top brands and we are their global partner and number-one partner of choice.”