Neiman Marcus is going through a “strategic realignment” and had to make a 5% cut of its staff. “It is always our intent to minimize the impact to existing associate jobs, and we take these types of decisions very seriously,” their CEO Geoffroy van Raemdonck said in a statement. But that’s not the only change. He’s also focusing the company on being more of an ultra luxury brand where they cater less to their less wealthy customers.
In an interview with Fortune Magazine, the Dallas brand CEO said “Many customers shop at Neiman Marcus 25 times a year and spend $27,000. I see much more risk in having a one-time transaction where I don’t know if you will ever come back.” He added, “Many customers shop at Neiman Marcus 25 times a year and spend $27,000. I see much more risk in having a one-time transaction where I don’t know if you will ever come back.” And this isn’t the first time he’s done such a thing. In 2020, he shut down the company’s 22 Last Call discount stores back in 2020. He explained the decision to Fortune saying, “We looked at the numbers and couldn’t see customers who shopped at Last Call and then became Neiman Marcus customers.”
One anonymous concerned worker spoke about a customer that spent $5,000 at the store over the past year that pulled up the interview and said they “felt personally insulted.” The worker added, “I’m scrambling now. What about the future millionaires? We work so hard to create a welcoming culture at our store for everyone and now we have our CEO excluding some that come in. He’s actually hurting us and our future.”
There are bad optics here but what can’t be denied is the fact that when recessions come or margins get thinner, companies have to weigh whether they’re going to go down catering to everyone or will they focus on their core clientelle. And that is what van Raemdonck is doing. It’s called going back to the basics so as to keep from stretching oneself too thin. He’s also spending $200 million to upgrade stores and get merchandise to customers faster. So that has to be considered as well.
Do you think Neiman Marcus’ CEO is being snobbish or is he simply doing what he needs to keep the brand alive and thriving?