After 33 years at Neiman Marcus, CEO Karen Katz contemplates life in comfortable shoes
For the past seven years, Karen Katz has been Wonder Woman in couture, fighting to right the financially embattled Neiman Marcus Group.
Now Katz is stepping down so she can step out.
On Sunday, February 10, 2018, Katz officially retires as president and CEO of the USD 4.7 billion retail company that includes Bergdorf Goodman, MyTheresa.com and Last Call stores in addition to Dallas’ iconic fashion-forward chain. She’s keeping her seat on the corporation’s board.
Come Monday, she’ll focus on her next big thing.
Will that be added outside board work, a deeper dive into philanthropy, consulting or something unexpected?
She is looking forward to a few months of “me” time to figure that out.
“When I turned 60 last year, I had a bit of an epiphany,” says Katz, who turned 61 Wednesday. “I’d been with the company 32 years and realized that if I was going to have another chapter in my life, I really needed to think about retiring.
“I’ve had an amazing ride, but it’s time to move forward,” she says.
Her friend Hedda Dowd, founder and CEO of Rise Soufflé, says that when Katz is ready for re-entry it’ll be on Katz’s terms.
“There is more talent, ideas and organizational skills in her pinky finger than most of us will ever know,” says Dowd. “The choice of who, what, when is hers. How nice is that?”
As tough as it gets
To say the past few years have been tough ones is an understatement — in Katz’s mind the period ranks right up there with when she navigated Neiman Marcus out of the Great Recession as company sales were lopped off by a billion bucks.
Dealing with disruptive changes within the retail industry, integrating Neiman’s massive inventory system, building a new-format store in New York’s luxury Hudson Yards development, and fending off the company’s debt crisis, have been just some of her daily challenges.
“When we can devote our time to thinking deeply about our customer, that’s the part of the business that’s so much fun,” she says over lunch at the flagship’s Zodiac Room. “I’ve said this my entire career, ‘People don’t need anything from Neiman Marcus,’ right? It’s all about wants and desires and emotional resonance.
“There wasn’t enough of that the last couple of years.”
Katz is one of a scant number of female CEOs in retailing and part of an even rarer breed of women who’ve risen through a company’s ranks without the benefit of family lineage.
She’s done her part to add to that cohort.
“I’m very proud that more than half of our senior executives are women,” Katz says. “Women are our target customers, and you have to have women executives and women on your board.”
She is also introduced the younger consumer to the Neiman Marcus brand of luxury and fashion and moved the retailer aggressively into the online era.
Another legacy is solidifying Neiman Marcus’ community commitment. Five years ago, she set up All Heart, the company’s foundation that focuses on youth education in the arts, which have been crippled by government cutbacks.
“It’s taken root in every community where we do business as well as here in Dallas,” she says.
“We become very focused on the education of youth in the arts. It’s a mission that I hope will live on.”
Katz also intends to continue to foster STEM education and is on the board of the Perot Museum of Nature and Science.
“Karen is a powerhouse,” says Jennifer Sampson, CEO of United Way of Metropolitan Dallas. “She’s a leader, a mentor to so many young women, and just so darn smart. She is a champion for people in need. Karen’s leadership has amplified heart power and corporate social responsibility at Neiman’s in immeasurable ways.”
The spirit of Mr. Stanley
The native Dallasite grew up in North Dallas and went to Thomas Jefferson High School.
She remembers when NorthPark and Neiman Marcus opened together in 1965. She was 8 at the time.
“I used to go there on Saturdays and troll the mall with my little girlfriends. So Neiman Marcus has been part of my life forever.”
Last week, Katz vacated the office once occupied by retailing visionary Stanley Marcus, to make room for her successor, Geoffroy van Raemdonck, who comes to Neiman’s from Ralph Lauren.
“It’s a legendary office,” she says. “Sometimes the walls speak to me.”
In 2000, Katz was promoted to CEO of Neiman Marcus Direct — think Neiman Marcus’ famous Christmas catalogue.
Marcus was no longer minding the store but was still its vigilant guardian.
“On any given week, I’d get a packet of catalogs from him with Post-it notes on them: ‘The photography looks terrible.’ ‘Here’s what I think.’ ‘Have you looked at this catalog to see how they do that?’ He taught me how to be critical of the catalog business through these notes.”
Katz applied those lessons when she put the Christmas book online in 2002.
She rediscovered all of those notes from Marcus when she was cleaning out and packing up her files. “Of course, I’m keeping them.”
So how did she come to occupy that hallowed space?
Katz might have become an attorney had it not been for an undergrad course in constitutional law at the University of Texas in Austin.
“It was the socratic method, where the professor called on you and you had to stand up to answer him,” she recalls. “The whole thing scared the bejesus out of me. I abandoned any thoughts of going to law school.”
Instead, she joined Foley’s Department Stores’ management training in Houston, having been rejected by Neiman Marcus for its training program. “I like to say, ‘Success is sweet revenge.’ ”
Katz learned to negotiate — one of her core strengths — while running Foley’s budget store.
“I had to go on the bad end of Seventh Avenue, where the dress manufacturers were,” she says. “At the time, their biggest customers were Sears and K-Mart, that bought hundreds of thousands of dresses. Foley’s budget had a nice business, but nothing like theirs. So I had to become a really good negotiator to get very sharp prices.”
Katz earned her MBA from the University of Houston in 1982 by going to class two nights a week for three years. She met her husband, Alan Katz, that final year and married him in 1983.
“Thirty-five years later, all good,” she says. “But we’ve only seen each other half of that time because I travel so much.”
When the couple became engaged, Alan insisted that they enter marriage debt free and paid off her USD 700 tab at Foley’s.
“Today, I tell him, ‘The buttons on my jackets are USD 700 each.’ So he had to get used to what I spend in a hurry.”
Turnabout fair play
In 1985, a former Foley’s buying colleague told Katz about an assistant manager position that had opened at the small Town & Country (now closed) Neiman Marcus store in Houston. She met the store manager, Tom Lind, who hired her on the spot — but not before Katz drove a hard bargain for her talents.
“It was admiration at first sight,” says Lind, who retires at the end of this month as senior vice president of Neiman’s real estate.
Lind and Katz stayed friends as each was promoted to higher positions within the company and even after he left Neiman’s for a time to help run a family business.
When Lind wanted to return to the Neiman’s fold 18 years ago, Katz found an executive slot for him.
“Karen is a great strategic thinker,” says Lind, who’s worked directly with Katz for the past three years on Neiman’s new store in the luxury retail development of Hudson Yards in New York.
“I love to remind the people I deal with that Karen Katz does not pay retail,” he says. “It’s a perfect representation of her style. She’ll always ask you for a little bit more.”
‘Very smart, very aggressive’
If Katz could put one day on repeat, it would be the one when she was named a divisional merchandise manager, overseeing buyers.
“That was such a huge goal of mine early on in my career,” she says. “Plus it was handbags. I was 30 and one of the youngest VPs at Neiman Marcus. It was a glorious day for me.”
Monday night, Katz was toasted and roasted at The Store by about 50 fellow Neiman Marcus senior executives and former colleagues who helped shape her career.
“They ribbed me and made fun of me. And I kinda gave it back to them,” Katz says.
Among them was her CEO predecessor Burt Tansky, who spotted “very high potential” in Katz in 1994, when he was fresh to the company and she was general manager of the NorthPark store.
“I found her to be very smart, very aggressive, understood the business very well,” says the 80-year-old, who retired in 2010. “I thought she could be someone who could grow in the company. And I was right.”
He became her mentor and champion, steadily promoting her every two or three years — and eventually naming her his successor.
“Burt was instrumental in me achieving what I did,” she says. “He had much more confidence in me than I ever had in myself.”
Katz has a strong support network of girlfriends who have her back.
One of those is Maryann Brousseau Mihalopoulos, principal of the law firm Brousseau Naftis & Massingill P.C.
She and Katz have been BFFs for 21 years. They instantly bonded at a parent orientation meeting at St. Mark’s School of Texas when their sons were entering the first grade in 1996.
They struck up a conversation that included their mutual adoration for designer shoes.
Katz told Mihalopoulos that she worked for Neiman’s but not what she did. Katz knew so much about foot fashion that Mihalopoulos pegged her as a shoe saleswoman.
The very next morning, Mihalopoulos’s husband showed her Katz’s picture and a story in The Dallas Morning News about her promotion to senior vice president and director of stores.
“She hadn’t told me she how important she was at Neiman’s,” says Mihalopoulos. “She just wanted to be a girlfriend. That’s the side that most people haven’t seen in the past four years when she’s gone from hell and back. When you peel back the onion, you get a great, devoted girlfriend.”
Katz is a fitness fiend — up to a point.
She fasts on Thursdays and Mondays so she can eat as she pleases the rest of the week — especially on weekends, when she’s been known to OD on Mexican food and tortilla chips.
“But last Monday night, the dinner was so outrageous that I told the crowd, ‘Today’s supposed to be a fast day, but to hell with it.’ ”
One thing that will not change is Katz’s early morning workouts at the gym or outside, where she’ll be outfitted in Under Armour from head to toe. She sits on the activewear company’s board and is more than happy to be a running billboard of the brand.
Katz will not miss having to dress the CEO part every day — particularly in those high heels.
But don’t expect her to go too far. When Katz talks about dressing down, she means trading in her Gucci stilettos for Gucci sneakers.
And she’s not about to give up her obsession with expensive designer handbags.
“You can’t take couture out of the girl after she’s been wearing it for 33 years,” Katz says.