The last time I saw Karen Katz, the CEO of Neiman Marcus Group, she was in the valet line at a November fundraiser for the Perot Museum of Nature & Science, looking as relaxed as she had in a very long time. Someone else who saw her that evening observed: “She looked like a person who just found out she didn’t have cancer after all.”
Whether Katz realized then that her time was coming to an end at the Dallas-based luxury retailer, who knows? But according to reports by The Wall Street Journal, Reuters, and others, the Neiman’s chief executive since 2010 is on her way out, to be replaced by a new, “outsider” CEO soon.
Katz, who’s 60, will keep her board seat, said the WSJ, which added that the company has been searching for a new top executive for a while now. Rumors that Katz’s days were numbered became national news in 2016, after the company watched its earnings plummet, slashed hundreds of corporate positions, floated and then canceled two IPO filings in three years, and groaned under a debt load of nearly $5 billion from a 2013 leveraged buyout.
But Katz, who’d joined Neiman’s in 1985 and worked her way up through the ranks, denied the rumors of her imminent departure and soldiered on, reorganizing and “streamlining” the company’s operations. “It has not been fun for her for some time,” a former Neiman’s executive says. “But the changes that were made have been on the financial/operations side; nothing in the buying office has changed. That seems strange and odd. …They did try some consolidation in the buying offices, but that was really just rearranging the deck chairs on the Titanic.
“Clearly, we’ve been out of step for some time from what people wanted to buy,” the ex-executive goes on. “I hear all the time from people complaining that our merchandise was outdated and not fresh and new. If you don’t change the merchandise mix-up—the merchandising strategy—nothing is going to change.”
Katz’s successor, the former exec adds, ideally will be well-acquainted with luxury retail: “It’s a high-pressure job, so it has to be somebody who comes from high-end retail.”
Neiman’s did not respond immediately to a request for comment.