Store Wars!
A short time ago, in an upscale retail world not so far away, Neiman Marcus reigned supreme—especially in Texas. Now Saks Fifth Avenue is coming to the Houston Galleria to challenge Neiman’s on its own turf. How will the empire strike back?
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The rivalry between Saks and Neiman Marcus offers a rare glimpse into the high-stakes world of specialty retail, with its glamour, grand showmanship, and cutthroat business tactics—all carefully calibrated to generate enormous profits. It is a world that depends on a select group of customers, mostly women, who spend tens of thousands of dollars on clothing and accessories each year. In Houston the question on everyone’s mind is whether those big spenders will stay loyal to the second floor of Neiman’s or succumb to the temptation of Saks’ own second floor, where they’ll be able to buy, among other items, a shiny little green Versace slip dress for a mere $3,930.
Miller thinks he knows the answer: He confidently predicts that the Galleria Saks will become Houston’s most successful luxury store. When informed of such a boast, Tansky just shrugged. “Texas is our back yard,” he said, “and we’re not giving up an inch.”
IT IS EARLY JUNE, AND Houston’s “A-list of shoppers,” as one sales associate describes them, are arriving on the second floor of Neiman’s for a fashion show and sit-down luncheon honoring Bill Blass, a designer who creates clothes specifically for high society. A bull of a man with a bronze face and a slightly red nose, Blass kisses the women on their cheeks and calls them “my gals.” His gals are all vivacious and good-looking, their skin as tight as a surgeon’s gloves, and although many of them are well-known charity fundraisers who serve on more committees than congressmen, what they do most often in their lives is dress. Houston socialites probably have more occasions to dress than any other women in the world. They have separate outfits for lunches, cocktail parties, dinners, and black-tie balls. “There’s always a style competition going on among the Houston women,” says Mary Beth Aspromonte, a three-time member of the Chronicle’s best-dressed list. “You’re always looking around at lunch to see who is wearing what designer that day.”
Among the hundred or so guests stepping off the escalator are mainstays of the Chronicle’s society pages—from the blond beauty Carolyn Farb and Mayor Bob Lanier’s flirtatious wife, Elyse, to the prima donna of Houston shoppers, Lynn Wyatt, whose attendance at Europe’s haute couture shows in the seventies and eighties cemented her reputation as one of the world’s most famous clotheshorses. Milling about them are Neiman’s sales associates, merchandise managers, couture specialists, publicists, and the store’s general manager, 44-year-old John Capizzi, his brown eyes darting back and forth. When he spots Bobbie-Vee Cooney, a bespectacled, bubbly woman in a pink-checked suit, he greets her enthusiastically and leads her to the main table to sit with Blass and Wyatt. Though she is hardly as well-known as other Houston socialites, Bobbie-Vee is a celebrity at Neiman’s. She attends almost every one of the store’s trunk shows, the early showings of samples from new designer lines, and she loves to spend. (Her husband decided to buy a chunk of Neiman’s publicly held stock after he studied his wife’s credit card bills, figuring that the retailer had to be making money.) By the end of the afternoon, Bobbie-Vee—with the aid of four Neiman’s employees—will buy a couple of suits, a velvet evening gown, and a cocktail dress from the new Blass line. “Let’s face it,” she says. “If you don’t have the clothes, then you might as well not try to participate in the social world. There are just too many things to go to.”
The Galleria Neiman’s refuses to divulge any information about its customers, but according to local gossip, there are at least fifty women who spend a $100,000 a year at Neiman’s and several dozen who spend $50,000. The two biggest spenders are supposedly a mother and daughter whose purchases total more than $1 million a year. “Honey, in this town women don’t shop—they buy!” says Joan Lyons, the daughter of a well-heeled trucking magnate.
And Neiman’s has geared itself to keep that crowd buying. Because the Galleria store is crucial to the company’s overall success, Razieh Bagheri, the manager of the Galleria Neiman’s couture department, is asked to go to the fashion shows in New York to tell the head buyers exactly what her customers need. If she sees a $30,000 evening dress that she believes a particular Houston socialite will buy, she will ask that it be ordered. The top sales associate on the second floor of Neiman’s, Sylvia Goldstein—a short, peripatetic 64-year-old—is paid nearly $200,000 a year, according to a Neiman’s insider, because of her astonishing list of affluent clients. In two closely guarded three-ring binders—she literally would not let me come within ten feet of her when she showed them to me—Goldstein records the names and dress sizes of some 250 women, along with personal details like their birthdays and their favorite colors. Although Goldstein had no sales experience and no knowledge of couture clothing before she started working on the second floor in 1972, she has learned how to cast a spell on her clients. Some of them won’t go out at night before calling her to ask what they should wear. “Almost everything I put on, head to toe, I buy from Sylvia,” says Elyse Lanier. “I trust her judgment and her taste completely.”
As if to prove the point, after the luncheon, Goldstein shows Lanier a Blass-designed ocelot-print blazer and pants with a matching georgette coat. For a moment Sylvia drops her smile and shoots Lanier an intense look. “Elyse, it’s you,” she says. Nearby, Blass himself gives her a wink, and Capizzi sidles up to offer an appreciative nod. “I want it!” Lanier says a little breathlessly, and the entire drama plays out in less than four minutes—a classic case of the Neiman’s mystique at work.
Capizzi has been spending a lot of money recently to remind her and other women about that mystique: The week before the Blass luncheon, the Galleria store brought in California designer Richard Tyler for another fashion show. “It seems Neiman’s is bringing back an old-fashioned grandeur,” Carolyn Farb told me, raising her eyebrows ever so slightly. “And I think we all know why, don’t we?” Indeed, just before the Tyler show, many of the Neiman’s women found themselves invited to a charity brunch at the old Saks just down the street to hear Capizzi’s counterpart, Ed Bodde, the general manager of the Houston Saks, discuss the closing of the original store and its reopening at the Galleria. The silver-haired Bodde is well-known within the designer-label set. From 1981 to 1989 he was the general manager of the Galleria Neiman’s, helping guide that store to prominence before quitting over disagreements with Neiman’s corporate management. (One former Neiman’s vice president says Bodde was “the type of old-school manager who turned the Houston store into his own fiefdom, and under the Neiman’s regime of the late eighties, that became not such a politically correct thing to do.”) But when Philip Miller signed on at Saks, he quickly hired Bodde, first sending him to the Beverly Hills store and then bringing him back to Houston to prepare for the Texas assault. “Just like Phil, Bodde has been itching to take on Neiman’s,” says another retail executive who knows Bodde. “He thinks he knows Houston women better than anyone, and now that he’s getting a new, bigger store, he is sure he can get them to defect.”
At the Saks brunch Bodde told the hushed crowd that the new Galleria store would look like a palace, with marble columns, limestone floors, and a massive domed center atrium rising up three stories. He detailed plans for a day spa, a new restaurant that would stay open late for dinner, a hair salon run by Hollywood hairdresser Jose Eber, and a special private-shopping service for high-dollar customers called the Fifth Avenue Club. There would even be a special room called the Salon—built like an old-fashioned drawing room with silver-leaf walls and a fireplace—to showcase the store’s most expensive evening gowns. The women burst into applause. When Bodde announced that sixteen shoe designers would be added to the shoe department, the women applauded again.
For months Bodde had been currying favor with women noted for their hefty Neiman’s charge accounts. He had offered tickets to the opera, sent limos to take them and their husbands to dinner at Houston’s best restaurants, and even flown some of them to Louisville for the Kentucky Derby—all at Saks’s expense. In his wiliest move he persuaded Saks executives to donate the proceeds from the company’s opening-night Galleria gala to the Nellie B. Connally Breast Cancer Fund at the University of Texas M. D. Anderson Cancer Center (money from the Neiman’s anniversary galas will go to the Texas Cultural Trust, an organization that raises money for civic arts groups and artists). By doing so, Saks has linked itself to a charity whose supporters include many top Neiman’s shoppers, such as Farb, Lanier, and Nellie Connally’s daughter-in-law, Diane Connally, a stunning brunette who is also a customer of Sylvia Goldstein’s. All three told me they plan to attend the Saks soirée.
When I asked Goldstein what she thought about all this, she sighed and said, “I’m going to feel a little pang in my stomach if I hear about my customers’ shopping somewhere else.”
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