I’ve sworn I’d do this for a long time, so here goes: a quick weekly Candy-Wrap on issues affecting real estate life for our readers. We’ll take a look at pressing issues, big business deals, and maybe even a little bit of rumor and gossip in the real estate industry! Let me know how you like it and send in your tips!
Is Neiman Marcus Headed For The Sale Rack?
The week started with a chilling report out of the New York Post that our very own Neiman Marcus may be contemplating a sale to luxury retailer Saks Fifth Avenue. The current owners — majority investor Pacific Investment Management Co. (PIMCO, an American investment management firm and one of the largest asset management firms in the world) plus lesser investors Davidson Kempner Capital Management and Sixth Street Partners, are looking for an exit amid declining sales and profits, blaming Belgium-born CEO Geoffroy van Raemdonck for the negative performance. (He apparently fancies catering the stores to the uber-rich, 2 percent only, wanting to shed the hoi polloi and less-heeled shoppers.)
Van Raemdonck is married to designer Alvise Orsini, who relocated his Orsini Design from Dallas to NYC where the couple now live having sold their 6676 Lakewood Boulevard estate this past March. Their Dallas abode was an architecturally significant, blue-tiled roof Lakewood home. The Italian Renaissance-inspired home was designed by architect Anton Korn and built in the 1930s
It was a 2020 spread on this home published in PaperCity Magazine right as Neimans was handing out pink slips (and charging furloughed employees for healthcare) that got van Raemdonck in hot water. According to the Post, Neiman Marcus’ financial partners are in a civil war, even wanting to sell off über luxe retailer Bergdorf Goodman, which Neiman Marcus owns. Neiman Marcus, naturally, is not talking: a spokeswoman says the retailer doesn’t comment on rumors and speculation.
A couple of things:
Neiman Marcus recently moved into a beautiful, state-of-the-art headquarters office or “Innovation Center” at CityPlace Tower. And Neimans has been sold three times in 15 years, including in 2020 when in bankruptcy reorganization. Financial experts say the debt from its last two leveraged (financed) buy-outs put it into bankruptcy, and then the pandemic finished the job.
Last year, the Dallas City Council approved a $5 million incentive package to help keep Neiman’s headquarters here, and not move to Irving or Plano. According to District 12 City Councilwoman Cara Mendelsohn, those funds get pulled back if the company shutters or leaves town.
Neimans and Saks are famous upscale luxury stores, along with Bergdorf Goodman, which some claim is even more chic. Maria Halkias, retail editor at The Dallas Morning News asks whether it makes sense to consolidate and get rid of one or two of the three largest luxury department stores. Heck yes. It is the business of investment management firms to make money and turn a profit for investors. So they would take the Neiman Marcus store portfolio — there are 36 Neiman Marcus stores in the US, and 41 Saks stores — and forge efficiencies. (Saks Off 5th is a spin-off luxury outlet store owned by Saks/Hudson Bay.) So in duplicate markets, it might be more profitable to consolidate stores, merchandise, and sales personnel. After all, more people are shopping online these days, including more than 30 percent of Neiman Marcus customers.
Which means lay-offs.
In June. Neimans reported a decline in third-quarter earnings and a 9 percent drop in annual revenue. In February, the Post said “slowing sales forced Neimans to lay off 5 percent of its workforce or about 500 employees, including completely axing store greeters who handled a variety of customer service functions like returns.” I really liked them.
The Dallas Neiman Marcus stores would probably be safe, as we no longer have a Saks Fifth Avenue — one once existed at the southern end of the Galleria, an area that is now being torn down. But I’m sure Hudson Bay would take a long, hard look at profitability and shutter any store that wasn’t producing. My biggest concern would be the downtown Dallas store.
According to the Post, all three principal owners agreed to consider the Hudson Bay bid at a July board meeting. Meantime, I was shopping online today and found a dress at Bergdorf’s on sale for about $400 that was listed for $1,300 at Neiman Marcus. A Michael Kors frock. Go figure.
Mitchell Gold + Bob Williams Suddenly Shutters
The luxury but touchable furniture brand Mitchell Gold + Bob Williams, with 27 showrooms across the U.S. and famous clients such as Hillary Clinton, shut down abruptly this week. There are five Texas shops, including two in North Texas — Knox-Henderson and The Shops at Willow Bend — and an outlet in San Marcos.
Founders Mitchell Gold and Bob Williams opened in 1989 and sold the company in 2015 to the Stephens Group, an Arkansas-based private equity firm. The partners retired from management and active board roles but remained connected to the business, which started with seven dining room chair styles and half a dozen different dining tables. The company was founded on the principles of comfort, beautiful design, and purposeful home furnishings. There are deep Texas ties: Bob Williams is a graphic artist who was born in Dallas and grew up in Conroe, our Executive Editor Joanna England’s hometown; Gold was a furniture buyer for Bloomingdale’s.
Frontgate Moving From Legacy West to Preston Royal
Frontgate, the luxury retail store that started as a catalog store, is closing its huge Plano store/showroom at Legacy West and moving to half the space once occupied by Barnes & Noble Bookstore at Preston Royal’s northwest quadrant. Frontgate’s sister company, Ballard Designs, is across the street.
This looks like an effort to get a much smaller real estate footprint since the Legacy West store is twice as big as the 9,443-square-foot space under construction. Austin-based apparel retailer Tyler’s is the next-door neighbor, as it moved into one-half of the former Barnes & Noble space in 2021 and remains popular with local residents.
Drone Delivery at Walmart Supercenter in Plano
If you live within six miles of the Walmart Supercenter located at 8555 Preston Road, get ready for an automated, pilot-less drone delivery service. The store partnered with Wing, a drone delivery provider backed by Alphabet, Google’s parent company, to serve 60,000 residences in North Texas.
What can you order? Ready-to-eat meals, groceries, essential household items, and non-prescription medicines. The little suckers fly up to 65 mph and make soft landings, at least we hope!
