Richard Smith, a prominent businessman and philanthropist who built a major conglomerate that for many years owned the Neiman Marcus Group as well as movie theater, bottling and publishing companies, died Sept. 9 at his home in Brookline, Mass. He was 95.
Smith was a shrewd, patient and very private investor. Unlike other investors and private equity funds that typically flip companies in a matter of five years or so, Smith controlled Neiman’s for two decades, supported its growth and served as its chairman.
Despite the showy nature of Neiman’s, with all its trunk shows, fashion galas and over-the-top Christmas catalogues, Smith shunned the press and rarely made store appearances. Meetings with store management were generally in Boston, where he was based, or by phone, rather than in Dallas, where Neiman’s based.
In the Sixties, Smith began diversifying General Cinema, a drive-in theater chain founded by his father, into bowling alleys, indoor movie theaters and bottling operations.
In 1986, Smith bought a controlling interest in the former Carter Hawley Hale, which operated Bergdorf Goodman and Neiman Marcus as well as Holt Renfrew in Canada and the former Wanamaker’s and Thalhimers chains, thereby rescuing it from a takeover attempt by Leslie H. Wexner, the former chairman and chief executive officer of L Brands Inc. In a key maneuver in the takeover battle, Smith converted a big chunk of CHH stock into a majority stake in NMG, leading to a restructuring of CHH into two companies, one for the department stores that would be called Carter Hawley Hale, and the other The Neiman Marcus Group. Eventually, CHH went bankrupt and was taken over by Federated Department Stores, while Neiman Marcus emerged as the nation’s strongest luxury retailer, a status it held for decades.
In 1991, General Cinema purchased Harcourt Brace Jovanovich, and two years later, the company split into Harcourt General, consisting of the publishing business and the controlling interest in Neiman Marcus Group; and GC Cos., which held the theaters.
In 2000, General Cinema sold Harcourt General to European publisher Reed-Elsevier, and in 2005, Smith sold the Neiman Marcus Group to private equity firms TPG and Warburg Pincus for $5.1 billion, personally raking in more than $600 million from his interest in the retailer. He also capitalized on trading Neiman Marcus shares over the years.
Allen Questrom, the former chairman and ceo of J.C. Penney Co. Inc., who ran Neiman Marcus from 1988 to 1990 before heading up Federated, Barneys New York and J.C. Penney, once said of Smith, “He’s been a very good investor, long-term. He never did things on the short.”
Questrom also said it wasn’t Smith’s style to fixate on stock price, in whatever company he invested in, or work the business purely for the sake of lifting the stock. “He believes that the stock price is a product of the quality of the business over time, and was generally less involved in it,” Questrom said.
Smith fostered the growth of Neiman Marcus in the Eighties and Nineties with his thumb’s-up approach on significant capital expenditures for new stores and renovations, creating spacious, unsurpassed retail showcases for building designer brand offerings, well before luxury sales took off in the U.S. He was also supportive of information technology, enabling Neiman’s to maintain a grip on its customer base and clientele and merchandise information.
“With capital requests, or if you had a plan for the year, he was involved,” said Questrom. “But he wouldn’t deal with you on day-to-day issues. He wouldn’t call you on the phone if the business went bad for a month.”
Gilbert Harrison, the founder and former chairman of Financo Inc., once told WWD, “The Smiths have made some brilliant investments over the years, and they’ve always had great managers.”
The late Marvin Traub, former Bloomingdale’s chairman who was Smith’s classmate at Harvard College, class of 1946, once described Smith as “soft-spoken, easy to deal with, and just very smart. There are no bells and whistles. Underneath it all, he’s very strong-willed.”
Other members of Smith’s family also had stakes in Neiman Marcus Group. Smith’s son, Robert, who served as co-ceo, and earlier president and chief operating officer of the Neiman Marcus Group, was more visible in the running of the business, particularly on real estate matters. He was instrumental in getting the Fifth Avenue property to launch Bergdorf’s men’s store in 1990.
Richard Smith graduated from Harvard College with a bachelor of science degree in 1946, served in the Navy and later worked for his father’s chain of drive-in movie theaters, the General Cinema Corp., which was started in 1922 in Massachusetts. In the decades ahead, he led the company’s development into a diversified enterprise.
In addition to his investments, Smith provided financial support and leadership in numerous health, educational, cultural and charitable institutions and organizations including the Dana-Farber Cancer Institute, the Boston Symphony Orchestra, Boston Children’s Hospital and Harvard University.