So, That Downtown Neiman Marcus Store Debacle Was Not About Real Estate…
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The store may not be saved after all?
A downtown Dallas consortium got to work Tuesday, trying to save our downtown Neiman’s store after reports that the hold-up was a real estate problem based on land leases (See Preston Center West). But after Slaughter Partners announced they’d donate the leased strip of land to the City of Dallas to help Neiman’s stay downtown, it appears the City won’t need to manage the luxury store’s 99-year-old land lease after all.
Saks responded late Wednesday that they appreciate the offer, but do not have plans to keep the historic store in Dallas.
This all began earlier this month when “the landlord” sent Neiman Marcus a notice to terminate occupancy after years of negotiations to extend the 99-year-old lease at the site. Neiman owns a majority of the building and other owners have existing ground-lease deals with portions of the property, but a dispute with Slaughter Partners was allegedly a point of contention with the store staying.
It turns out that wasn’t really the case.
The consortium includes leaders from Downtown Dallas, Inc., the Dallas Economic Development Corp., Dallas City Manager Kimberly Bizor Tolbert, and chairman and founder of Todd Interests, Shawn Todd. They helped negotiate the Slaughters’ strip of land.
“We are meeting next week and have heard from thousands of concerned Texas shoppers who were encouraged by the news today from our Consortium and are watching this closely,” Downtown Dallas President Jennifer Scripps said in a text message.
It’s sad because department stores are cultural markers of our society. Unfortunately, they are, like print news, slowly dying a “hardening of the arteries” death, that analogy according to Sidney Doolittle, a Chicago retail consultant and partner at McMillan & Doolittle.
Founded in Dallas in 1907, Neiman Marcus was the epitome of style, thanks to the impeccable good taste of the founders and their descendants. Neiman Marcus stocked its store with beautiful clothes and decked-out settings, unusual for Texas and the grit of a rough-neck cotton belt city, but oil-rich Texans bought it up and pumped millions into the store’s accounts.
As cities cropped up across the U.S., department stores revolutionized buying basic provisions. Choosing fabric and hats turned shopping into a leisure activity that then became an experience — especially as stores adapted elaborate marketing plans that included private shopping nights, divas from Europe, and even Royalty, as Neiman Marcus did with those genius FortNights. This all led to more sales, more manufacturing, importing, and commerce.
From Dallas, Neiman Marcus became the highest-level luxury store in the country. Other department stores existed in Dallas, such as Sanger Brothers Department Store, and the A. Harris & Company, which merged in 1968 as Sanger Harris.
In fact, Carrie Marcus Neiman and her husband, Abraham Lincoln Neiman, got their retail feet wet at Sanger Brothers. But none compared to Neiman Marcus.
I was not born in Dallas, but I knew all about Neiman Marcus. Once my mother met an impressive woman from Dallas at an insurance sales conference, and noted how beautifully she was dressed.
“She shops at Neiman Marcus.”
(You do know the founders turned down the chance to all but own a “new sugar drink” franchise called Coca-Cola, right?)
Since 2024, Neiman Marcus has been owned by Saks Global, the U.S. division of the giant Canadian-based Hudson Bay Company, the largest and oldest corporation in Canada. It sold for $2.7 billion. The American division (Saks Global) includes several full-line luxury stores — once all competitors — such as Bergdorf Goodman, Neiman Marcus, and Saks Fifth Avenue; plus the off-price luxury stores Neiman Marcus Last Call and Saks Off 5th. They also own another former Dallas icon, home furnishings website Horchow.
The Neiman Marcus department store has been a staple in Dallas for more than a century, helping cement the Texas city as a global fashion destination in addition to being a downtown retail anchor. The Northpark store now strongly anchors one of the few remaining malls in the country.
This all reminds me of my childhood friend, Joan Spiess, who was the granddaughter of the founder of a small luxury department store in Elgin, Illinois, where I grew up. Joseph A. Spiess & Company was the “Neimans” of our industrial town 40 miles west of Chicago. I remember they had really nice paper bags — my mother bought a book in the book department — yes, they sold books, makeup, clothes, and even some furniture. She was so embarrassed when her book slipped out of that bag: “Everything You Have Always Wanted to Know About Sex.”
They had a vacuum tube payment system: you put payments in for what you were buying and it was sent via tube to the central cashier’s office to make change and create a receipt. You waited for the change and receipt to be sent back again to wherever you were in the store — that was considered technology! I lost track of Joan when I went away to college. Her family closed the original department store in 1984; downtown Elgin was essentially dead. But the shopping centers that had sprung up in the mid to late seventies were still showing signs of life, so Spiess pumped money into the nearby mall stores: St. Charles Mall, Randhurst Mall in Mt. Prospect, and West Dundee’s Spring Hill Mall. This sounds very much like what Saks says they have planned for Neiman’s Northpark store.
“Small-town regional department stores are in the late stages of hardening of the arteries,” Sidney Doolittle said. “They are expensive to operate, and their core customers now have so many more choices. Chain stores are taking up the slack where many of these small-town stores used to be.”
In 1991, Joseph Spiess & Company filed for Chapter 11 Bankruptcy protection. Now, that majestic original Elgin store is now home to condos.
Will the Downtown Neiman’s store suffer a similar fate? There’s a lot of this story we don’t know and some we may never know, but we’ll continue to ask the questions. And so it seems this Neiman’s debacle truly is not just about real estate.
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Nice article. Condos might not be so bad if they left the branding on the building. Oh, “I live at the Neiman’s store downtown.”
I think Neiman’s identity is as large as the city’s, and of course the two are associated. Neiman’s was always more than just a department store, which is how I view Sanger Harris or Macy’s.
And the plaque that causes the harding is the excessive debt load.
It is no surprise that Saks Global is going forward with their plans to close the downtown NM. The “landlord dispute” was a very convenient excuse to disguise their desire to optimize their investment in NM by consolidating operations and eliminate underperforming assets. I am sure the DT Neiman’s has not produced “acceptable” operating results on a four wall basis for a number of years, if not decades. That said, previous ownership realized the historical brand value of the downtown location in the overall NM story, not to mention its importance to the citizenry of Dallas, and for that mater, the shopping public of North Texas for the past century. The financial underperformance of the downtown store has easily been covered (and condoned) over the past number of years by the positive performance of the balance of “the fleet”. It is so terribly unfortunate that the management/ownership of Saks Global is so incredibly tone deaf to the importance of the downtown Neiman Marcus store to Dallas … and the Neiman Marcus Brand. I remember when Saks Fifth Avenue opened in Dallas (1974). Evidently they have learned very little about the culture of North Texas over the past 50 plus years. They have always been an underperformer in this market, but closing the downtown NM is insanely off the mark!
So on point. The GF’s and I had some consommé and a popover today at Zodiac; savored the beauty of, the history of what is to be lost. Mourning. Please stay. The buzz could be fantastic for the bottom line.
Love the condo idea. As was the NM store, it would be the belle of the ball in downtown Dallas.
They used the landlord thing as an excuse. They saw an out and took it. They clearly want Neiman Marcus out of Dallas.
Saks Global doesn’t care about Neiman-Marcus’ fabulous past, nor its importance as a downtown Dallas landmark.. They’re in it for the money, period. They have no appreciation whatsoever for the intangibles that money can’t buy — in this case, Neiman’s iconic status, storied history, and priceless heritage — all of which are far more valuable than mere corporate profit. What a shame!
Ted Marlow and Cody Farris both eloquently expressed my perspective. I am profoundly disappointed in the probability of a shuttered Downtown Neiman’s, and am highly discomfited in the disingenuous explanation provided by Marc Metrick, Saks Global CEO.