Last month, reports were flying that Karen Katz was on her way out as president and CEO of Neiman Marcus Group. Comparable-store sales at the venerable, Dallas-based luxury retail chain have been declining for several quarters now, leading Fortune magazine to call it the company’s roughest patch since the Great Recession. Neiman’s has also suffered a costly customer data breach, as well as the loss of some key top executives. In such bad-news situations, the person calling the shots naturally is often the most vulnerable.
Neiman’s sagging fortunes aren’t all Katz’ fault, of course. The company and its private-equity owners are staggering under a giant debt burden. And the oil crash has hit Neiman’s customers hard—especially in Texas, where seven of its 42 Neiman Marcus stores are located. While layoffs and bankruptcies have become routine in the oil patch, many of the company’s luxury consumers have watched their energy portfolios shrivel and their oil-and-gas royalty checks shrink, making them less likely to shell out for that pricey new tux or ball gown.
Now there’s still more bad news for Neiman’s. The company just announced 80 layoffs—about 50 of those in Dallas—partly due to a “reorganization” of its online and brick-and-mortar operations. That’s on top of last year’s 500 job cuts, nearly 160 of which directly affected North Texas. Reacting earlier this month to reports of her imminent demise, Katz told a New York audience that, contrary to “the rumors out there,” she wasn’t going anywhere. One wonders if, after this week’s news, she remains quite so sure.
