Neiman Marcus on Friday announced the retirement of Karen Katz from the role of President and CEO, effective Feb. 12, according to a company press release. She has held the position since 2010.
Ralph Lauren executive Geoffroy van Raemdonck will succeed Katz, who will continue to serve on the company’s board of directors and will work with van Raemdonck to facilitate a seamless transition, the company said.
The appointment is part of a long-term leadership succession planning process to ensure growth and evolution of the company, according to the release, suggesting that van Raemdonck will more or less take over where Katz is leaving off.
In Katz, Neiman Marcus is losing a longtime company veteran and retail maven. She began at the company in 1985, and starting in 1996 took on the role of director of stores, rising through the ranks in that division to eventually lead the Neiman Marcus department store unit in 2002. Her experience encompasses marketing, merchandising, strategy and business development.
"As CEO, Karen helped establish Neiman Marcus as a digital leader in luxury fashion and retail and put the company on a path for long-term growth. We are extremely grateful for her vision and significant contributions, which have spanned over 30 years at the company, including the last seven as CEO, and look forward to continuing our work together on the board," David Kaplan, chairman of the board, said in a statement.
Van Raemdonck is also a retail veteran, but a bit of an outsider. Most recently he served as Ralph Lauren's group president of Europe, Middle East and Africa, a position held from November 2014 to presently, according to his LinkedIn page, although The Wall Street Journal reports that he left last year. Previously, from 2013, he was CEO at St. John Knits, and van Raemdonck has also held executive posts at Louis Vuitton and at L Brands, according to Neiman Marcus’s release.
Presumably one pillar of his new tenure will be Neiman’s newly minted “Digital First” strategy, unveiled in October. The move aims to further the company's position in the luxury retail space "by anticipating customers' evolving behaviors and engaging them more deeply to drive traffic online and in stores.”
But the company’s debt is a particular problem. If there’s one type of retailer that doesn’t need the added burden of a major debt load, it’s a department store in a sector beset by changing shopper behavior and the migration of department-based merchandising to big-box and specialty retailers. But Neiman Marcus is heavily saddled with loads of debt from leveraged buyouts. Fitch Ratings included Neiman Marcus on a secondary "loans of concern" list released in October, indicating some — though not necessarily imminent — default risk over a total outstanding loan balance of $2.8 billion. The retailer’s total long-term liabilities stand at about $6.5 billion.
The retailer in November reported a much-needed top-line sales increase for its first quarter of fiscal 2018 as well as the first same-store sales increase since the fourth quarter of 2015. Total revenue rose 3.8%, compared to Q1 last year, to $1.12 billion. Same-store revenue rose 4.2%, which the retailer attributed to its new digital first strategy, as well as to new technology and marketing tools.