Neiman Marcus Group Ltd on Friday named Geoffroy van Raemdonck, an executive at upscale clothing manufacturer Ralph Lauren Corp, to succeed Karen Katz as chief executive officer of the debt-burdened luxury retailer next month.
Katz, who has led Neiman Marcus since 2010, will retain her board seat after retiring as CEO on February 12, the company said.
Van Raemdonck, 45, was Ralph Lauren’s group president for Europe, the Middle East and Africa and head of travel retail. He previously was CEO at St. John Knits International Inc, where he oversaw a turnaround of the luxury apparel retailer.
Neiman Marcus had been hunting for a CEO for some time, but several top executives at other companies spurned its approaches, the Wall Street Journal reported Thursday, citing sources.
GlobalData Retail Managing Director Neil Saunders said van Raemdonck’s experience at St. John Knits could make Neiman Marcus more attractive to younger shoppers. “He could be the breath of fresh air that Neiman Marcus needs,” Saunders said.
“That said, the biggest challenge is managing Neiman’s debt load, which is a millstone around the neck of the company,” he added. “There are no easy solutions to this, and it is unlikely van Raemdonck has any tricks up his sleeve to remedy the problem.”
The company is struggling with a nearly US$5 billion debt load, due mainly to its 2013 leveraged buyout by Ares Management and Canada Pension Plan Investment Board from other private equity firms.
Like other retail chains, Neiman Marcus has also suffered as customers move away from brick-and-mortar stores in favor of online shopping. Same-store sales rose for the first time in two years in its latest quarter, when it benefited from Katz’s efforts to invest heavily in its online business.
Katz, 60, will be eligible to receive nearly US$2.5 million as a lump sum following her retirement as CEO and another US$1 million before March 14, 2019, Neiman Marcus said in a regulatory filing. Van Raemdonck’s annual base salary will not be less than US$1 million, the company said.
(Reporting by Siddharth Cavale in Bengaluru and Richa Naidu in Chicago; Editing by Martina D’Couto and Lisa Von Ahn)
Photo courtesy of Reuters/Rick Wilking