Luxury Department Stores Declined Because They Forgot About Customers

Earlier this week, Larrimor’s announced it will close after 87 years in downtown Pittsburgh. In September, Neiman Marcus turned off the lights at its downtown Dallas flagship after 112 years. Levy’s in Nashville, 171 years old, goes dark in December.The obituaries will blame rent, debt, e-commerce, and the death of the suit. Those were the weapons. They were not the cause.I spent two decades on the other side of the buyer’s desk, selling into rooms like these. I know how they were run, and I know why they emptied.The LedgerThe largest name went first. Saks Global, which owns Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman, filed for Chapter 11 in January with $3.4 billion in funded debt. By spring it had marked two dozen department stores for closure. It also announced it would shutter all but 12 of its 70 Saks Off 5th outlets.The independents followed, one city at a time. Hanny’s in Rochester, Minnesota, closed this summer after 86 years. Peter Manning New York filed for bankruptcy in August.Each has its own proximate cause. Hanny’s owner cited overhead and construction. Levy’s cited a lease it could not accept. The particulars differ. The pattern does not.The ConceitThe multi-brand store ran for decades on a quiet conceit. It believed the man came for the store.The man didn’t come for the store. He came for a person. A person who knew his shoulders, his wife’s opinion and the dinner he was dressing for. He came to discover something new. When that person retired, the store kept the name over the door and lost the reason anyone walked through it. The salesmen who knew their clients were replaced by clerks who saw a card number.Then the merchant was replaced by the buyer. I sat across from a great many of them. The best were students of the customer. Most were students of the spreadsheet. They bought for the trade show, for the brand rep and for the approval of the next buyer down the street, which is how every store came to carry the same names as every other. In the meetings that mattered, the product was rarely the subject. The questions were margin, return terms, and how much the vendor would contribute to the store’s advertising. Vendors were made to wait. Customers were reduced to a sales history. And for all the ceremony on both sides of the desk, we were selling someone’s laundry.Owners made the same mistake from the top. They confused inheritance with insight, and a famous address with a reason to visit it.Stanley Marcus and his family pictured in 1955. Bettmann/ Getty ImagesStanley Marcus told his buyers to find the best in the world. It did not need a famous name. It only needed to be the best. That was why people went to Neiman Marcus. Over time the instruction reversed: the famous name became the requirement, and the best became optional.Luxury was never the recognized name. It was the discovery of something exquisite, something not recognized but remembered.A store that no longer knows the man has nothing to offer him that a website cannot deliver faster and cheaper. The internet did not take these customers. It simply caught them when the store let go.What SurvivesNot every old house is falling. The family stores still standing share one trait: they never stopped knowing the man by name. But a client book is not a future. Those stores will last exactly as long as their clients do, unless they give the next man a reason to walk in.What comes next will be smaller and slower. It will be built by people who make the clothes and stand in the room themselves, with no buyer in between. Fewer pieces, chosen with intent. Doors that open by appointment, because attention is the actual luxury. The future is small, mono-brand rooms where the designer has to actually be present, with a specific point of view and his own direct hand in the work.Exhaustion exists with the way things are now. The man has not stopped wanting to be dressed well. He has stopped wanting to be processed.The VerdictWe will hear a great deal this winter about the end of an era. That is the wrong frame. An era does not end because rents rise. It ends when the people inside it stop paying attention.These stores were not killed. They were left, one unremembered customer at a time.Vivek Nagrani designs suits and starts arguments. He is the founder of ARTICL3.

Luxury Department Stores Declined Because They Forgot About Customers

Luxury Department Stores Declined Because They Forgot About Customers

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