In the world of retailing, running Bergdorf Goodman has historically been “the plum job.”
There are just two stores to wrap one’s hands around without worrying about branches; the trappings are as elegant as they get in a retail setting, and top designers worldwide vie for prominent positioning on the selling floors.
Nevertheless, replacing Joshua Schulman, BG’s president who surprised the organization by taking a job as president of the Coach brand, won’t be that easy. Bergdorf’s parent company, the Neiman Marcus Group, is up for sale, adding to uncertainties, and there’s not a lot of talent out there. In addition, Bergdorf’s business has been slumping due to reduced traffic, the botched integration of the NMG One common merchandising system and shifting consumer spending priorities.
Schulman was said to have a close working relationship with Karen Katz, president and chief executive officer of NMG.
One candidate for the job could be Ed Burstell, a retailer who’s steeped in luxury. In February, he left Hudson’s Bay Co. after just two months working as head of partnerships. Before that, he was managing director of Liberty of London, where he was instrumental in growing the business and forming innovative collaborations with the likes of Hermès, Manolo Blahnik and Nike. Earlier, Burstell worked at Bergdorf’s as senior vice president of accessories, footwear, fine jewelry, designer jewelry, cosmetics and fragrance, and before that, he was general manager of Henri Bendel.
In the meantime, Jim Gold, Neiman’s president and chief merchandising officer, will oversee the Bergdorf’s team, going back and forth from New York to Dallas where NMG is based. Gold was president of Bergdorf’s from 2004 to 2010.
“Bergdorf’s needs a people person,” said one former luxury store executive, who suggested there’s got to be a leader to pump up sales associates to stimulate traffic and better business. “Josh came from the wholesale side. His style wasn’t like Jim Gold’s or Ron Frasch’s,” the former Saks president and former Bergdorf’s president. “Josh is more of a strategic person. He is very organized. He built more professionalism. Before, the store was run like a mom and pop but he brought a more structured approach and organized the buying line better.
“What he did was working but [the retail] economy has been terrible.”
At Bergdorf’s, Schulman developed a five-year strategic plan, called BG 20/20, involving new business opportunities including pumping up bg.com and extensive renovations at the women’s store, the heart of which was an overhaul of the main floor of the women’s building for accessories and fine jewelry. Jewelry became “a store within a store” on the 57th Street side and “a grand hall” for leather goods emerged off the Fifth Avenue entrance flowing over to designer accessories salons extending to the 58th Street entrance.
Bergdorf’s is in the process of creating an additional 25,000 square feet of retail space encompassing the eighth and ninth floors, which housed executive offices. The two new floors are expected to open by 2018. Beyond that, it would be very difficult to increase square footage further.
“The key is to try [making] Bergdorf’s more productive, get people in with marketing, service, sales associates reaching out, building more e-commerce,” said the source. “In the long run, Bergdorf’s will be fine, hopefully. Karen Katz brought Josh in. His leaving came as a shock.”
According to another source close to Bergdorf’s, the recently renovated main floor for jewelry, handbags and accessories has momentum and is outperforming the overall business, which remains challenging.
Schulman did trigger efforts to take a more curated, distinct approach to the merchandise with programs such as the recent BG Style Experts campaign and the upcoming Linda’s at Bergdorf Goodman shop, where Linda Fargo, the store’s senior vice president, women’s fashion director and store presentation, selects items reflecting her personal style.
In addition, Schulman brought in some unexpected labels such as Vetements, Off-White and Fenty by Puma, while maintaining the luxury appeal by emphasizing luxury mainstays like Chanel, Valentino and Goyard.
He pushed digital marketing, with Bergdorf’s said to have more Instagram followers than Neiman Marcus, Saks Fifth Avenue or Barneys New York, and online the assortment was bolstered with a wider range from Akris to Gucci to niche street brands like Johanna Ortiz.
At Bergdorf’s men’s store, Schulman put greater emphasis on advanced labels such as Off-White, Chrome Hearts, Kith, Balenciaga and NikeLab and was able to attract some new customers. Shoes have lately done well, with the recent addition of limited distribution brands such as Chanel and Balenciaga.
Schulman was not available to comment on Bergdorf’s or Coach.