Bergdorf Goodman deals in high-end fashion items, like $1,500 Saint Laurent boots and $2,600 Bottega Veneta shoulder bags. At its most luxuriant edges, it sells extravagant goods like a $24,000 Prada jacket made from dyed lamb shearling.
At those prices, shoppers demand a standard of service that has dwindled in recent years, even among luxury brands, as retailers took shortcuts to try to keep costs low, while buying habits changed and store visits declined.
Now America’s most glamorous department store wants to return to its golden age, when shopping at its Fifth Avenue edifice combined entertainment and commerce, with highly personalized treatment that lured Hollywood stars, socialites and royalty. Steps away from the Plaza Hotel and Central Park, the landmark building’s interior and exterior have been backdrops for feature films and television shows.
But Bergdorf Goodman, now 125 years old, is at a critical juncture. Over the last six years, the store has survived two bankruptcies and a few different owners, with persistent questions about whether the business unit would be sold off. In June, it emerged from bankruptcy with Saks Fifth Avenue and Neiman Marcus as part of the Exemplar Luxury Group.
The cornerstone of the retailer’s future is its top sales associates — employees who attend to customers in personal shopping suites and behind the glass countertops in the showrooms.
“There’s this notion that we are custodians of something magical,” Geoffroy van Raemdonck, the new chief executive of Exemplar, said in an interview. “Every single employee in the back of house, in the front of house, in the executive office — we handle this with white gloves.”
Sales associates at the store have had extensive training on how to build long-term relationships with customers and how to engage with them on the sales floor. They can direct shoppers to a wide range of personalized services: handbag restoration, private purchases, personal stylist consultations, custom tailoring and special events.
But despite its lavish offerings, Bergdorf Goodman has struggled to attract shoppers over the past year as Saks Global went bankrupt. Many vendors didn’t get paid and stopped shipping their goods to the store. Sales associates complained that they had few new bags, necklaces and dresses to show their clients, according to a person familiar with the matter.
Bergdorf Goodman’s opulent roots run deep. In 1901, Edwin Goodman became a partner in a tailoring shop near Union Square owned by Herman Bergdorf and soon bought him out. Goodman moved the business in 1928 to its current location, on Fifth Avenue at 58th Street, the former site of Cornelius Vanderbilt II’s enormous French Renaissance-style chateau.
The Bergdorf Goodman Building took some cues from the grand atmosphere of its Gilded Age predecessor, with classical French hallmarks like the rusticated stonework and the mansard roof with dormer windows. Nearly a century later, the structure still radiates the excesses of that period.
The Goodman family sold the retail business in the 1970s, but kept ownership of the building and has leased the space to the department store ever since. Bergdorf Goodman’s various owners never opened more stores across the United States in search of growth, as did some other New York department stores, such as Saks, Barneys New York and Bloomingdale’s. Only in 1990 did it open a single new location (sort of) — a men’s store right across the street.
Half of Bergdorf Goodman’s sales come from customers who spend more than $10,000 at the store each year, and many spend more than 10 times that.
The retailer’s 40 highest-volume sales associates account for about $200 million of its annual sales. That means each of them sells, on average, around $5 million in luxury goods per year. Sales through associates and personal shoppers are up 5 percent this year. Mr. van Raemdonck wants to push that figure higher. Exemplar declined to share total sales figures for the store.
“It has become a lost art,” Jessica Ramirez, a co-founder of the Consumer Collective, a retail advisory firm, said of high-end client service across the industry. “Particularly in luxury, where I don’t think it should have ever been forgotten.”
In addition to old-fashioned relationship-building, the company has equipped those salespeople with new technology to keep those valuable shoppers. One tool, powered by artificial intelligence, helps preorder highly anticipated products, gives product recommendations and manages client information and preferences.
The retailer has also pushed to add more exclusive brands to its selection of merchandise and has held special events for select shoppers upon a brand’s debut.
The store itself may see some improvements too. Linda Fargo, a 30-year veteran executive of Bergdorf Goodman who now oversees the fashion office and store presentation, said she hopes to renovate the building’s old penthouse, the once-lavish apartment the Goodman family once lived in. It could be used to host events for shoppers and provide another taste of the old glam.
Company executives are counting on those investments to pay off as Bergdorf Goodman begins yet another new era.
“Through all the changes, I think everyone has recognized that Bergdorf is unique and needs to stay unique,” Ms. Fargo said. “Bergdorf’s has always been able to operate as a bit of a unicorn.”
For a time, that singularity insulated Bergdorf from the decline of shopping malls, which left national department store chains bereft of customers. But after it was acquired by groups that owned other department stores, Bergdorf Goodman became vulnerable to the same challenges.
By 2020, Bergdorf Goodman’s owner at the time, Neiman Marcus Group, filed for bankruptcy protection as it squirmed under a mountain of debt. Then the business was bought by Saks Global, which filed for bankruptcy in January, just 13 months later.
Signs of the old glamour remained, even during bankruptcy proceedings. The store held several private events each month for elite customers to view and buy exclusive merchandise in New York or remotely. Trunk shows at its high jewelry showrooms often result in $300,000 to $500,000 in sales.
In May, the store invited about 60 customers to an event that featured one-of-a-kind handbags that wouldn’t normally be available. It generated $1 million in sales.
Also that month, panoramic displays of a moving subway train appeared behind mannequins clad in Chanel garments in the storefront windows, and pedestrians stopped to gawk and take photos. Chanel had given the store a one-week head start on the release of its annual Métiers d’Art collection.
But by then, Bergdorf Goodman, which had remained profitable, had already fallen behind on the annual fashion calendar, Mr. van Raemdonck said. The retailer’s relationships with fashion labels had deteriorated because of missed payments by its previous owner. Saks Global owed Chanel $136 million when it filed for bankruptcy, according to court filings. The French fashion house’s return to the windows signaled that it still got along with its longtime partner.
Mr. van Raemdonck said Bergdorf Goodman did not lose any more vendors in its most recent quarter, and that company executives had worked to mend those bonds.
“The largest brands have committed capital to pay for expressing their brand and transforming the experience,” in the store, he said.
There is also the lingering matter of whether or not Exemplar could eventually sell its prized asset.
Bergdorf’s has had many suitors over the years, including Bernard Arnault, the chief executive of LVMH, the world’s largest luxury goods company. Last year, Saks Global held talks to sell a 49 percent stake in the business for about $1 billion, and bidders included sovereign wealth funds from the Middle East.
Mr. van Raemdonck said that he considered Bergdorf Goodman a “valuable element” of Exemplar’s portfolio but that management would keep monitoring its options.
“We’ll continually look at what makes sense,” he said. “But there’s no immediate intent.”
Three months after emerging from bankruptcy, Bergdorf Goodman ushered celebrities and fashion designers past a velvet rope to fete its 125th anniversary in September. Among the revelers was Sara Goodman, a great-granddaughter of the founder, nursing a martini.
“I think that my great-grandfather had a lot of vision and passion and style, and he built the business with a sharp eye and was very clever about trends and about what was happening,” Ms. Goodman said. “I still think Bergdorf’s is the most luxurious and glamorous department store in the world, and I hope that it will retain that and even enhance that in the years going forward.”
Alex Vadukul contributed reporting
The post Can America’s Most Glamorous Department Store Return to Its Golden Age? appeared first on New York Times.
