NEW YORK — Even a rocky U.S. economy isn’t enough to slow down Neiman Marcus Group CEO Burton Tansky.
In an exclusive interview with Footwear News, 70-year-old Tansky, known by his compatriots as a driven retail magnate and antique sports car afficionado, said the Dallas-based group — which includes 39 Neiman Marcus stores, Bergdorf Goodman, Neiman Marcus Direct and 24 clearance centers — is going full speed ahead with expansion plans.
The firm, which is owned by private equity firms TPG and Warburg Pincus, will open five or six new Neiman Marcus stores over the next three years, and plans to begin two more major remodels in fiscal 2009, as well as a number of minor ones. The retailer plans to unveil a new Neiman Marcus in Topanga, Calif., in September and expects to debut this fall its revamped Atlanta store, which underwent a 50,000-sq.-ft. expansion.
At Bergdorf Goodman in New York, part of the main selling floor was recently remodeled and expanded by 1,600 square feet. Despite the weak economy, Bergdorf’s early fall deliveries are selling at a good pace, Tansky told investors during a third-quarter conference call.
However, Neiman Marcus Group tightened fall inventory levels at its stores due to the tough economy. In the most recent third quarter, revenues slipped to $1.06 billion from $1.07 billion a year earlier.
Still, Tansky told investors, the retailer is sticking to its strong merchandising and customer service strategy and has no plans to start cutting prices. “We don’t lead the pack on promotional. That is not our thing,” Tansky said on the quarterly call. “It really isn’t our core customer’s thing either because they’re regular-price shoppers and always have been.”
Tansky, opened up to FN about the pull-back in customer spending, the surprising strength in footwear and his passion for the shoe business.
FN: How do you know the shoe business so well?
BT: That’s my job — I know all our businesses. I happen to like the shoe business and always have, and I make it my business to know what’s going on in the shoe business as I do in many of the businesses in our company. Over the years, I’ve directly merchandised shoes going back to the Saks days, where I was the president of Saks and the senior merchant. I’ve had many very positive experiences. I find it’s an industry where the store could build good partnerships, have strong relationships and work together to build our businesses. We have an outstanding merchandising team here that works in the market and has built a big business both at Bergdorf and at Neiman.
FN: Speaking of shoes, you recently promoted a “Sex and the City” sweepstakes. Has that translated into sales?
BT: Yes, it has. It’s been quite exciting. It’s translated very, very definitively.
FN: Why are sales translating so well?
BT: Shoes are a very important commodity in a woman’s life, and she has seen on [“Sex and the City”] a couple of shoes that are very, very desirable, and she’d like to have [them].
FN: How’s the men’s footwear business?
BT: It’s been fabulous. We’ve had very good growth. We’ve expanded [the size of] the departments. We’ve gotten the personnel to sell and we’ve added to the breadth and depth of the stock. That was one of our target businesses some four, five years ago, and it’s more than reached our expectations.
FN: Why was men’s footwear one of your target areas?
BT: We felt it was underdeveloped and was an opportunity. We were absolutely right.
FN: Are men pulling back on footwear spending in this uncertain economic environment?
BT: The men’s footwear business seems to be holding up as well as the women’s business. Men are pulling back, but there is real appeal in men’s footwear right now. There’s a good spectrum of both casual shoes and dress shoes.
FN: In general, how are your customers reacting to the economic slowdown? Are they buying less?
BT: Recently, some of these customers — not all of them, but some of them — began making decisions to buy a little less. But they’re not trading down. They appreciate quality. They will always appreciate quality. Some of them are buying less for a variety of reasons, but we don’t see any trading down.
FN: Any idea how to get customers shopping more?
BT: Absolutely. We already know how to do it — we’ve done it before. We’re not changing our game plan. We are not changing our method of merchandising. Our services remain at a very high level, and we continue to be Neiman Marcus, serving our customers and serving them well.
FN: Are you holding back on any new store openings?
BT: We are not. We continue to open new stores. We are dedicated to the future of this company. We’ll open a new store in September in California. Next year, we’re opening in [the state of] Washington. Over the next three years, we are opening five or six new stores. The point is this: We’re continuing to open new stores, we’re continuing to redo the stores that require redoing and we’re continuing to make certain that the stores are well maintained.
FN: What about a Neiman Marcus store in New York City?
BT: The answer is [still] no because we have Bergdorf Goodman. We don’t compete with ourselves. Bergdorf’s is a fantastic store.
FN: Do you feel you’d be taking your own market share?
BT: Yes. Some of that is possible. And then we have to find the “100 percent location” in New York, [which] is where Bergdorf stands, so [a Neiman store] wouldn’t have the 100 percent location. We only take the 100 percent location where we go.
FN: How long do you expect to stay in the retail business before you retire?
BT: Well, 30 or 40 more years. [Chuckles.] No, don’t write that down. The answer is: I’m enjoying myself and I’m having a great time, and I have no other plans beyond what I’m doing today.