Neiman Marcus, the luxury department store burdened with nearly $5 billion in debt, may be preparing to appoint a new CEO to engineer a turnaround.
Karen Katz, a Neiman lifer who has served as CEO and President since 2010, is stepping aside and will be replaced by an outsider, according to a report from The Wall Street Journal. Neiman Marcus has not confirmed the report, but a replacement already has been named, according to CNBC.
Katz plans to retire from her executive duties, but will retain her board seat, the report said. Several current CEOs spurned Neiman’s approaches about taking the position.
Katz first joined the Dallas-based retailer in 1985, and served in various executive positions before becoming CEO, including EVP of Store Operations, President of catalog division Neiman Marcus Direct and President of NM stores.
In an era when department stores struggle to find footing and many privately owned retailers continue to be saddled with debt as a result of buyouts, Neiman Marcus has had the misfortune of dealing with both problems. Neiman still has to pay off a $4.8 billion debt load, mainly due to its leveraged buyout in 2013, when Ares Management and Canadian public pension fund CPPIB acquired it from other private equity firms.
Neiman Marcus has had a calamitous few years ever since; it filed to go public in August 2015, but scrapped the IPO in January 2017. Later that year, the retailer revealed it was exploring potential strategic alternatives, including a possible sale. Hudson’s Bay Co. entered talks to acquire the retailer, but the talks ended without a deal and Neiman abandoned plans to sell shortly after.
The retailer has been very forward thinking in its innovation initiatives in recent years, building out customer-facing technologies such as the in-store MemoryMirror and the Snap.Find.Shop. mobile visual commerce app. This “Digital First” strategy led the retailer to a 4.2% comparable sales increase in Q1 2018, the first increase in nine quarters.But net losses in the most recent period totaled $26.2 million, extending a string of losses that date back to July 2016.