Neiman Marcus CEO is accused by staff for being ‘snobbish’ after saying luxury chain will focus more on the 2% of its wealthiest customers because they bring in 40% of all sales
- CEO Geoffroy van Raemdonck announced the switch in priorities
- Change comes after luxury store closed more than 20 discount outlets in 2020
- Changes shocked employees who spend their paychecks splurging at the chain
Neiman Marcus’ CEO has been dubbed ‘snobbish’ by his employees after saying the luxury chain will focus on the company’s wealthiest clients because they bring in a majority of sales.
Geoffroy van Raemdonck sat down with Fortune magazine last week for a controversial interview and announced the change in priority towards the wealthy two percent of customers who account for 40 percent of sales.
The shift comes after the company closed down more than 20 discount stores in 2020 that carried leftover grabs from the luxury chain.
‘Many customers shop at Neiman Marcus 25 times a year and spend $27,000,’ van Raemdonck told the magazine. ‘I see much more risk in having a one-time transaction where I don’t know if you will ever come back.’
CEO Geoffroy van Raemdonck was dubbed ‘snobbish’ by his employees after saying the luxury chain will focus on the company’s wealthiest clients
Store employees were outraged, especially since some spend their paychecks shopping at the store and aren’t a part of the 2 percent.
One sales representative felt ‘insulted’ at the CEO’s plans to exclude non-wealthy customers, including employees, after spending at least $5,000 at the chain in the past year.
‘I’m scrambling now,’ the employee told The New York Post.
The sales representative argued that not all of the current clients are ‘millionaires’ but many strive to become one in the future. The employee worried about excluding the wealthy-in-waiting, and destroying the store’s reputation.
‘We work so hard to create a welcoming culture at our store for everyone and now we have our CEO excluding some that come in,’ the sales representative said. ‘He’s actually hurting us and our future.’
A former employee added: ‘Not all of our clients spend $27,000 and they aren’t millionaires. Why would he say this and alienate some of our customers – and with such a snobbish tone.’
Neiman Marcus wasn’t immediately available for comment.
After closing the chain’s ‘last call’ shops, Raemdonck noticed that no shoppers at the discount stores became Neiman Marcus customers. This led him to shift toward focusing on his recurring wealthy clients.
‘We made a clear choice that we’re going to do one thing and do it well,’ Raemdonck told Fortune. ‘We believe luxury is about uniqueness and emotion.’
Neiman Marcus saw a 30 percent increase in revenue last fiscal year before it slowed.
The luxury store became the the first major US department store in 2020 to crumble amidst the economic setbacks from the COVID-19 outbreak.
Reuters reported the company had few options after the coronavirus spurred lockdowns that shuttered non-essential businesses, including all 43 of their stores.
To combat losing money, Raemdonck intends to shift the chain’s focus on the rich in anticipation of gaining more wealthy clients.