Karen Katz, CEO of Neiman Marcus Group, will be stepping down from her post, where she has served since 2010, according to news from The Wall Street Journal. The retailer has been beset with debt from two leveraged buyouts over the last several years and will be looking for an outsider to fill the vacant role. Katz will retire from her executive duties, but will retain her board seat.
Neiman Marucs has faced difficulties since it was last acquired for $6 billion in 2013 by Ares Management and the Canada Pension Plan Investment Board. A single transaction left the company $4.8 billion in long-term debt as of last fall. Katz has been a member of the team in some capacity or other since 1985 and was credited with helping the firm navigate out of the Great Recession a decade ago, even managing to return the company to pre-2007 profit levels.
But the digital era of sales has proven to be a more formidable challenge for department store players like Neiman Marcus than even the complete near-collapse of the world economy, and the chain has struggled with weakening sales growth as affluent shoppers who make up the chain’s base are being pulled toward more digital pastures.
Neiman Marcus filed to go public in 2015 but scrapped the planned offering in January 2017. There had been talk of a Hudson Bay acquisition, but those plans seem to have gone nowhere.
“We believe that we can deliver better shareholder value by remaining an independent retailer,” Katz said in an interview at the time.
Neiman Marucs has worked to up the level of its digital game under Katz. Those efforts are showing results but not enough to quell the worries of segment-watchers.
Her successor is expected to build on and accelerate the current strategy, according to inside reports.