Neiman Marcus CEO says he only wants Rich people shopping at his stores and plans to shut down all of their bargain retail stores Neiman Marcus Last Call “We are focusing on the most affluent customers where the price isn't the main consideration.”
Geoffroy van Raemdonck, the CEO of luxury department store chain Neiman Marcus is getting blasted by his employees — who are calling him out for being “snobbish” and alienating the company’s less wealthy customers by focusing more on their clients with the big bucks to spend.
Apparently, von Raemdonck recently sat down with ‘Fortune’ last week and dished on data within the company. The CEO claimed that just two percent of his company’s customers help deliver forty percent of its earnings.
Because of that, it is now reported that Neiman Marcus has plans to specifically cater to and focus more on better treating those shoppers who are willing drop it like it’s hot with ease — thus, spending less time courting the remaining clients who don’t really drop the pretty pennies.
The CEO also added that the Dallas-based department store will no longer sell “everywhere on the price spectrum, from clearance to high-end jewelry.” He claimed that by the company shifting their focus onto the more affluent clientele, they will avoid the “churn and the price is no longer the main consideration.”
While this shocking new plan is catching backlash, this isn’t the first time van Raemdonck did something this big. During his five-year tenure at the luxury department store, he made an even bigger decision to shut down the company’s 22 Last Call discount stores back in 2020.
Though some of the stores still remain open, speaking on the move, van Raemdonck explained why he chose to close the doors on some of the stores.
In his ‘Fortune‘ interview, he said, “We looked at the numbers and couldn’t see customers who shopped at Last Call and then became Neiman Marcus customers.”
The stated focus on the ultra-wealthy luxury customer seems to be in conflict with Neiman Marcus’s recent strategic moves.
For instance, In September 2021, Neiman Marcus partnered with streetwear publication Hypebeast to create a shoppable virtual showroom featuring exclusive sneakers from 11 luxury footwear brands, according to a press release. The styles were available for purchase on neimanmarcus.com and at 37 select Neiman Marcus brick-and-mortar locations.
Research shows that the earning power of the luxury streetwear customer differs significantly from the high-end luxury customer.
Two surveys covering a total of 40,000 customers and 700 industry workers recently conducted by strategy& (a subsidiary of PwC) in conjunction with Hypebeast found that 70 percent of streetwear customers make $40,000 a year or less. However those same customers were willing to spend on big-ticket purchases in the space. Fifty-six percent said they spent an average of $100 to $300 on a single purchase, and 32 percent of Japanese respondents in particular spent $500 or more on a single purchase.
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