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?

August 1997By Comments

Saks CEO Philip Meyer (center) flanked by president Rose Marie Bravo and COO Brian Kendrick.
Photograph by David Barry

Back in March, during the Gianni Versace show in Milan, Italy, Rose Marie Bravo, the boisterous president of Saks Fifth Avenue, suddenly exclaimed, “Houston!” Supermodel Naomi Camp-bell was strutting down the runway in a shiny little green slip dress, and Bravo, who was sitting in the first row, could barely contain herself. “That screams Houston,” she declared. “That’s exactly what we want.”

All around her, buyers for Saks dutifully took notes. When more models paraded out in the kind of dazzlingly colored dresses that have made Versace a favorite designer of celebrities and cutting-edge fashion mavens, Bravo said the word “Houston” again, and her associates took even more notes. If the members of the international fashion press were eavesdropping, they had to have been baffled. Why was Bravo, the woman who makes the final decision on which luxury apparel goes into Saks’s 51 stores around the United States, jabbering about a city in Texas?

The truth was that Bravo had been thinking about little else since the start of the year, when her boss at Saks, CEO and chairman of the board Philip Miller, decided to open the chain’s second-most palatial store (after its famous flagship on Fifth Avenue in New York City) in the Houston Galleria—at the other end of the mall from archrival Neiman Marcus. In upscale-retailing circles, the Neiman’s at the Galleria is renowned as one of the most successful stores in the country, with sales of more than $115 million a year. More couture clothing—apparel made by the world’s most expensive designers—is bought by women at the Galleria Neiman’s, which opened in 1969, than at any of the other thirty Neiman’s stores in the U.S., including Neiman’s nine-story flagship in downtown Dallas and its glittery outpost on Wilshire Boulevard in Beverly Hills. When women step off the escalator onto the second floor of the Galleria Neiman’s, they enter what one well-known Houston socialite describes as “a girl’s version of heaven.” Directly in front of the escalator is a Chanel boutique, flanked on one side by a boutique devoted to Giorgio Armani’s Borgonuovo collection (the most expensive line Armani makes) and on the other by a boutique dedicated to German designer Jil Sander. Elsewhere on the floor are collections by Dolce and Gabbana, Valentino, Christian Lacroix, Claude Montana, Badgley Mischka, Prada, Escada, Ralph Lauren, and Donna Karan. And all of it is presided over by some of the company’s best “sales associates,” a sleek group of eleven women and one man who persuade their customers to spend $4,000 for a basic jacket-and-skirt combination and $15,000 for an evening dress—and who are rewarded, in some cases, with six-figure salaries. “They are deadly, like beautiful cobras,” one Houston woman says. “The minute they lock their eyes on you, you know they are going to find something for you to buy.”

In the past, tony stores like Sakowitz, Marshall Field, and most recently, Barneys tried and failed to break Neiman Marcus’ hold on the upper-crust Houston woman. Even Saks, the grande dame of New York retailing, once before attempted to compete with Neiman’s, opening a store in 1974 a few blocks from the Galleria. It hasn’t gone out of business, but it has never really caught on either; though it is more than half the size of the Galleria Neiman’s, its sales have reportedly amounted to only one third of those logged by its formidable foe, according to Women’s Wear Daily. Neiman’s seems to have had too loyal a following among Texans who have grown up with its Christmas catalog and its His and Her gifts. City by city, it has used its muscle to secure exclusive rights to sell the top designers’ clothes, and it has been a major sponsor of the Houston Chronicle Best-Dressed Luncheon, which has led many socialites to believe that they had better spend their money at Neiman’s if they ever want to make the prized list. Even middle-class Houstonians who can’t afford Neiman’s  prices buy a tie or a jar of lotion there just so they can say they own something from Neiman’s. Driving up to the Galleria Neiman’s is like approaching a great cathedral. The 206,000-square-foot store is a sanctuary of conspicuous consumption, with cream-colored walls and perfect track lighting designed to show off the city’s most expensive clothes.

In the rarefied world of “specialty retail”—the industry term for stores that sell the highest-priced apparel and accessories—Neiman’s is only one of two large national chains left. The other is Saks. For more than twenty years the two behemoths have been squaring off across the country, opening stores in almost all the major metropolitan markets in the country—often within blocks of each other. As opposed to discounters like Wal-Mart, which sell lower-priced items, or department stores like Foley’s and Dillard’s, which sell mid-priced items, or even higher-end stores like Nordstrom, which concentrate on “bridge” merchandise (apparel that is costlier and more designer-oriented than what is found in department stores), Neiman’s and Saks focus mostly on top-of-the-line clothing, shoes, cosmetics, jewelry, handbags, belts, scarves, sunglasses, gloves, hats, and furs. (Neiman’s also specializes in home decoratives such as crystal, china, and silver.) Although Saks has more stores and sells more merchandise—its 1996 sales were $1.94 billion compared with Neiman’s $1.56 billion—Neiman’s attracts bigger spenders: Its stores average sales of $380 per square foot versus $343 per square foot for Saks.

For years Saks seemed content to play a distant second fiddle in Texas to Neiman’s, just as Neiman’s seemed happy to let Saks be the dominant player on the East Coast. But in the early nineties Saks hired Philip Miller, a handsome, charismatic man described by one colleague as the Gatsby of American retailing. Miller knows all about Texas. He was the president of Neiman Marcus from 1977 until 1983, leaving after the company’s board passed him over for the position of chairman, picking instead Richard Marcus, the son of legendary Neiman’s chairman emeritus Stanley Marcus. After his Neiman’s stint, Miller was tapped to run Marshall Field and later was lured away to Saks, where he began formulating a master plan to make Saks the leading outfitter of the nation’s wealthy—a title that most retail analysts have bestowed on Neiman’s since the mid-eighties.

Initially, Miller said, Saks was going to build more stores in California, New York, and Florida. But his ultimate target was Texas, the home of six Neiman Marcus stores: three in Dallas, two in Houston, and one in Fort Worth. Miller planned to renovate and expand the existing Saks locations in San Antonio and Dallas and told his staff to scout out space for new stores in Austin and Fort Worth and ordered a new Saks in west Houston at the Town and Country Mall (where a Neiman’s was already in place). In his most startling display of bravado, however, he ordered the construction of a new 210,000-square-foot Saks at the Houston Galleria in the space once occupied by Marshall Field. At least $50 million was budgeted for its construction, about twice what a large specialty store usually costs. “We’re going up against the five-hundred-pound gorilla at the other end of the mall,” Miller told me. “And we know we’ve got to be at our best.”

On September 10 the war for rich Texans’ hearts and credit cards begins. The new Saks at the Houston Galleria will open with a black-tie gala—a slap at Neiman’s, for September 10 happens to be the day of Neiman Marcus’ ninetieth anniversary. The next week, in fact, Neiman’s will throw two black-tie anniversary galas for itself, one in the downtown Dallas store and the other at the Houston Galleria. Saks executives insist they didn’t deliberately plan their party to upstage Neiman’s. Still, Neiman’s executives are clearly peeved that Saks has chosen this moment to try to capture the limelight. “We believe we have the finest specialty store in America, regardless of who else wants to come here,” snaps Burt Tansky, the no-nonsense CEO and chairman of the board of Neiman’s.

What makes this retail row especially interesting is that 59-year-old Tansky knows Saks as well as Miller, who’s also 59, knows Neiman’s. From 1980 to 1990 Tansky was the well-regarded president of Saks, and many retail analysts assumed he would eventually be named chairman and CEO. But when Miller was hired, a reportedly disappointed Tansky resigned and resurfaced as the vice chairman of Bergdorf Goodman, the elite Manhattan specialty store a few blocks north of Saks. Then, just as Miller began his push to expand Saks, Tansky was offered the top job at . . . Neiman Marcus. It was a delicious irony: Tansky and Miller, the two leading merchants of American luxury apparel, were finally going head to head.

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.”

DESPITE THE HEAVY TRAFFIC AT Neiman’s or Saks on an average day, a store’s success is based on the purchases of a small group of customers. Retail experts say that about 80 percent of the merchandise in a specialty store is bought by only 20 percent of the store’s customers. And there is no doubt about who most of those customers are: women 35 to 55 with lots of disposable income. They are the ones who drop in for a shopping spree and buy not only their clothes but also their shoes, cosmetics, and accessories and even their husbands’ apparel (50 percent of men’s apparel at a specialty retail store is bought by women). It is a remarkably thin market: Retail sources say that about 90,000 people nationwide participate in the frequent-shopper program at Neiman’s, meaning they spend at least $3,000 a year on their store charge card, while about 100,000 frequent shoppers at Saks are spending at least $2,000 a year. Accordingly, if just a couple thousand high-dollar shoppers at one store begin to make some of their purchases at another store, the first store’s profits can drop like a rock.

That is why, for all its elegance, specialty retailing is one of the most anxiety-ridden industries in America. Every three months a new batch of upscale apparel arrives at the store, and if the women don’t buy it, then the store is in trouble. “If you lose your focus on your customer for just an instant, you’re in danger of losing everything,” says Burt Tansky. “The retail graveyard is littered with great names who forgot that simple lesson.”

When Herbert Marcus, his sister Carrie, and her husband, Al Neiman, opened Neiman Marcus in Dallas on September 10, 1907, they seemed destined for that graveyard. The three of them were only in their twenties and had little retail experience; there was not even evidence that Texans of that rugged era knew what fine apparel was. But the trio was convinced that if they built a store, people would come. They became obsessed with finding the best apparel, and they didn’t hesitate to charge what it was worth.

What happened next was retailing’s version of Microsoft’s unveiling of Windows 95. Hundreds of shoppers lined up outside the store an hour before it was to open on its first day. Within weeks wealthy people were arriving from all over the state—and not all of them were particularly sophisticated. According to a company history, a barefoot young woman wearing a sunbonnet and a worn calico dress once walked in, bought almost $10,000 worth of clothes, and paid with large bills she pulled “from her bosom.”

No other institution taught Texans more about elegance than Neiman Marcus, and no other institution, at least in the first half of the twentieth century, brought Texas such national recognition. Herbert’s eldest son, Stanley, who came to work for the company in 1926 after graduating from Harvard’s business school, made Neiman’s the first store outside New York to advertise in national fashion magazines, in part because he knew it would intrigue the insular New York fashion world. He also started the Neiman Marcus Award for Distinguished Service in the Field of Fashion, which he presented to international designers like Christian Dior and Coco Chanel. “What we learned was that the collective glamour of a specialty store could sell a lot of merchandise,” says 92-year-old Marcus, who retired from Neiman’s more than two decades ago to start a consulting business he still runs today. “If you don’t have that glamour, you don’t last.” That glamour finally captured the attention of Vogue, whose editors proclaimed in 1953 that despite its location in far-off Texas, Neiman Marcus “belongs easily in that small aristocracy of fashion.”

There was another store, of course, that belonged in that small aristocracy: Saks Fifth Avenue. In 1924 Horace Saks and Bernard Gimbel, two leading New York retailers who were already operating their own department stores, had decided to join forces in opening what they called a “dream store” filled with the finest fashions. When New Yorkers started flocking to the store, the owners took their show on the road, opening Saks stores in Palm Beach in 1926, Chicago in 1929, and Beverly Hills in 1938. By contrast, because the Marcus family thought that much of their success was the result of staying on top of the highly personalized operation of buying and selling, they waited until 1951 to open their second store, in North Dallas. In 1963 they opened a third store, in Fort Worth. Eventually, however, Stanley Marcus became convinced that if the nation’s wealthy shoppers were given a choice, they would go with Neiman’s, so the company undertook a national expansion. Needing capital, the Marcus family sold a majority interest in the company to Carter Hawley Hale Stores, a national retailing firm. In 1971 Neiman’s made its first move out of Texas, opening in Bal Harbour, Florida—where, significantly, Saks already had a store. Saks responded in 1974 with its first Houston store. The war was on.

After Stanley Marcus left Neiman’s in 1975, Carter Hawley Hale stunned the industry by going outside the company and hiring a 37-year-old executive at Lord and Taylor, Philip Miller, as president. At around the same time, Saks—which had been sold by the Gimbel family to British-American Tobacco in 1973—also began bringing in younger blood, including Burt Tansky, who previously had been at I. Magnin, the specialty retail chain in California. Unlike old-style retailers who grew up in the business, Miller and Tansky were not to the manner born. Miller was in a pre-med program at Johns Hopkins University when his wife at the time became pregnant; needing a job, he accepted a full-time sales position in the men’s clothing department of a Baltimore store called Hamburger’s. Tansky, who graduated from the University of Pittsburgh with a liberal arts degree, took a position in the executive-training program at Kaufmann’s, a Pittsburgh department store, only because it was the best job offer he had. The two men first met in the sixties, when they worked together at Filene’s, a respected specialty retail store in Boston. Tansky was a store manager and Miller was a divisional merchandise manager. “Even back then,” Miller says, “we were already competing with one another.”

Except for their appreciation of fine apparel and their desire to get stores opened around the country, the two men were polar opposites. Tansky was known as an intense, sometimes abrasive leader who was blunt in his dealings with manufacturers. “He says what he thinks and doesn’t mince words,” Chanel’s president, Arie Kopelman, once said. “It’s not a game of subtlety with him.” Tansky rarely granted interviews with the press, and when he did, he said little. (One newspaper reporter would later write that Tansky “recoils at the slightest suggestion of personal revelation.”)

Miller, on the other hand, relished playing the showman. “He could charm the bark off a tree,” says Keith Nix, a former Neiman’s vice president. “People were captivated by him. When he’d walk into a room, it was like there was a light on him.” When designer Karl Lagerfeld arrived from Paris for a Houston fashion show in 1979, Miller had a high school marching band and a drill team on the runway to greet his private plane. After the show Miller took Lagerfeld to Gilley’s, the country and western bar. While the urban cowboys gaped, Lagerfeld walked around, fanning himself with a large multicolored fan the size of a Ping-Pong paddle.

Miller admits that he left Neiman’s in 1983 for Marshall Field because he was dismayed that Carter Hawley Hale had named Marcus’ son, Richard, then the vice chairman in charge of running the company’s business operations, as CEO. In 1986 Carter Hawley Hale sold Neiman’s to General Cinema (called Harcourt General today), which asked for Marcus’ resignation so it could bring in an outsider to be chief executive.

Regardless of who was running the company, Neiman’s had the upper hand in the battle with Saks throughout the eighties. Yet instead of maintaining an air of exclusivity, Saks responded by adding more lower-priced lines to draw customers. “It wasn’t Tansky’s fault,” says Alan Millstein, the publisher of Fashion Network Report and one of the country’s most respected retail consultants. “British-American Tobacco was getting ready to sell Saks, and they wanted cheaper merchandise to get a fatter bottom line. They stopped investing any capital into Saks’ stores. And as a result, Neiman’s started eating Saks’s lunch.” Indeed, in places like Beverly Hills, where shoppers demanded exclusivity, Saks could only manage $39 million in annual sales, versus more than $100 million at Neiman’s.

But in 1990 Saks was bought for a reported $1.6 billion by Investcorp International, a Middle Eastern company that had helped turn around luxury retailers like Tiffany and Gucci. When Investcorp named Miller vice chairman, Millstein says, “Tansky clearly saw the handwriting on the wall about who would become the next chief executive officer. So Tansky said good-bye and went to Bergdorf’s for the same money and certainly for much less prestige. He went from running forty stores to one store.” (Tansky declined to talk to me about his days at Saks.)

Meanwhile, Miller brought in a new president, Rose Marie Bravo, a former I. Magnin chairman and CEO known for her warm relationships with the world’s top designers. Together with chief operating officer Brian Kendrick, they hatched a plan to restructure Saks. They had the company’s logo redesigned; dumped clothing lines that could be found almost anywhere, including Tommy Hilfiger and Liz Claiborne; and began building new stores and expanding old ones, including a 115,000-square-foot addition in Beverly Hills (which now brings in $90 million in sales a year). Their Holy Grail, however, was Texas, the second-largest retail market in the U.S. and one dominated at the upper end by Neiman’s. (The six Neiman’s stores in Texas make up about 25 percent of the company’s sales.) Miller was not shy about his ambitions, telling a reporter in 1996, “We are going to take on Neiman Marcus in a direct way. Texas will be our primary focus as a company in 1997 and 1998.” When I asked Miller if he had any personal reasons for challenging Neiman’s, he roared with laughter and said, “Oh, please.”

For his part, Tansky joined the Neiman’s team from Bergdorf’s (a store also owned by Neiman’s parent, Harcourt General), after two consecutive CEOs were hired away by the rival retail conglomerate Federated. “Neiman’s was already a great piece of gold, and the board figured that Tansky was the perfect man to keep it polished,” says Millstein. But Tansky did much more than that. No doubt recalling the mistakes Saks made in the eighties—and certainly aware of what the new Saks team was doing—he ordered that Neiman’s store managers devote less space on the floor to bridge apparel and start bringing in even more higher-priced merchandise. He demanded more $5,000 Badgley Mischka evening gowns as well as a larger assortment of the most expensive St. John designs for women. He had $1,000 cashmere coats replaced with $3,000 coats. Although his demanding style made some Neiman’s employees nervous—“Burt will never be known as Mr. Warm and Fuzzy,” an associate remarks—other employees praised him for his drive to find the best luxury products. “My goal has been to bring back the glamour and mystique that customers know so well,” Tansky told me with a steely look. “And in the process we’re leaving our competitors in the dust.”

Clearly this is Tansky’s chance to show the specialty retail world what he can do—and he is not going to let Miller interfere. Both men say there is no personal animosity involved in this fight, but according to New York retail consultant Howard Davidowitz, “They are totally focused on beating each other. Every day they come to work consumed with winning.”

FOR THE GLITTERATI OF HOUSTON, IT IS going to be a busy September. After its opening gala, Saks will be bringing in an array of designers, including Isaac Mizrahi and Calvin Klein, for special in-store appearances. “We are capturing all the sophistication and grandeur that has made our flagship New York store so great,” says Miller. “Our store will have a significantly different feeling than Neiman’s.” Meanwhile, for its ninetieth anniversary, Neiman’s plans three weeks of special events that will remind longtime customers of the old Fortnight celebrations. Neiman’s is unabashedly playing up its Texas heritage: The columns of its Houston Galleria store and downtown Dallas store will be turned into oil derricks, store windows will show models with big hair, and there will even be a chili bar on the main floor. “We are celebrating old Texas, gaudy Texas,” says Tansky. “Why not? That was one of the great eras in all of history.”

Just about everyone in Houston society has an opinion about which store will win. Some wags snipe that Saks’s move to the Galleria is as smart as Neiman’s thinking it could set up a store on Fifth Avenue and take away Saks’s business. Besides Neiman’s, the Galleria is already packed with top designer-owned boutiques, including Max Mara, Dolce and Gabbana, Emporio Armani, Gianni Versace, and Gucci. Just down the road is the nationally acclaimed specialty women’s boutique Tootsies, which is renovating in preparation for the opening of Saks, repainting its walls and adding a hair salon and a gift department. Neiman’s, too, plans to remodel parts of its store for the fall. “Everyone is going all-out to keep its customers,” says one Houston retailer. “So where does Saks think it’s going to find all these extra women to shop at its big new store?”

Others say, however, that Saks is not taking that huge of a risk because it will be able to build from a base of already loyal customers who frequent its existing store. One of those is Linda Brown, an attractive blonde in her early thirties who is surely destined for the Chronicle’s best-dressed list. (When I met her, she apologized for what she was wearing—silky Donna Karan pants and a white Lacroix blouse—exclaiming, “You caught me in my car-pool clothes!”) The very picky Brown shops almost exclusively at Saks because of the personal service. “The moment I walk in, someone is there to wait on me,” she says. “At Neiman’s I’ll be there for five to ten minutes before a salesperson even comes up to say hello to me.”

Saks executives also believe they will be able to lure an emerging new group of wealthy people: Baby boomers who are reaching their peak earning years (ages 45 to 54) and are more willing to buy luxury goods. But that’s not going to be enough. “We’re going to need to get some customers out of Neiman’s,” admits Saks’s chief operating officer Brian Kendrick. To that end, Saks has been making some bold moves. If the stories going around the second floor of Neiman’s are to be believed, Saks’s general manager, Ed Bodde, has made overtures to Sylvia Goldstein and other sales associates. Goldstein does not deny that Bodde has asked her to switch sides, but she insists that she would not leave Neiman’s. Of course, if she did switch it would be an enormous coup, just as it would be a smart preemptive strike for Neiman’s to lure one of Saks’s top sales associates. Fearing that very scenario, Saks would not reveal to me the names of its top Houston sales associates, presumably to keep Neiman’s from knowing who they are.

Just as fierce is the competition to land the exclusive rights to showcase the apparel of certain top designers. “It’s the most cutthroat part of the business,” says one retailer, “because if one store has the rights to the season’s hottest designer and the other store doesn’t, then every fashion-conscious woman in town is going to come by that first store to take a look. And while she’s there, there’s no telling what else she might buy.” While Neiman’s has locked up Chanel and Armani Borgonuovo—two of the most prominent names in designer clothing—Rose Marie Bravo has wrangled some exclusive deals of her own. When women step off the escalator onto the second floor of the new Saks, they will see the top lines from designers who cannot be found at the Galleria Neiman’s: Calvin Klein, Zoran, Gucci, and of course, Versace, with his little green dress.

Ever aggressive, Bravo is also plotting to lure the Chanel boutique to Saks when its contract with Neiman’s expires in 1998. According to insiders, the fight for Chanel is going to be fierce—a $3,500 Chanel suit, after all, is the uniform of choice for rich Houston wives—and Kopelman, Chanel’s president, admits he will not be hesitant about playing one retailer against the other. “We are going to want to be in the store with the most high-end customers,” he says. “If it’s clear that store is Neiman’s or that store is Saks, then that’s where we want to be.”

In the end, of course, the winner of the Neiman’s-Saks brawl will be the store with the best merchandise. “What we’re going to see in Houston is a test of tastes,” says Stanley Marcus. “Who’s got the most appealing merchandise? Who’s got the right colors and sizes? Who presents it in the most appealing way?” Many designers are selling to both stores—including Bill Blass, Escada, Donna Karan, and Ralph Lauren—and in those cases, says Marcus, “the question is which store will pick the right pieces to capture the women’s attention.”

Houston socialites have never before found themselves in this kind of position. “It’s like there are these two great knights, Saks and Neiman’s, jousting for the ladies,” says Carolyn Farb. Some aren’t anxious to talk about it. When I asked Lynn Wyatt whether she would be shopping more at Saks or Neiman’s, she said, “I’m not going to tell you, and don’t you dare misquote me!” But then there is Bobbie-Vee Cooney, who has already discovered the advantages of such a battle. “Well, I can’t tell you which store is going to win,” she says, “but I expect they’ll be inviting us all to a lot more parties. And as much as I hate for my husband to hear this, that means we’re going to need more things to wear.”

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