Big idea: To use the Web to turn luxury retailer Neiman Marcus into an authority and an educator on fashion. "We have a very robust online business, but convincing luxury houses to join us on the Web site has involved a lot of groveling," says Karen Katz, 53, who currently runs Neiman Marcus's department stores and will take over as CEO of the entire corporation in October. The next step is to better exploit social media. "People ask me, 'What keeps you up at night?' It's delivering a personal experience to every Neiman Marcus customer. It's the hardest thing we do. We have to use the digital domain to reach even more people and be a resource to get educated on fashion and luxury. We're a retailer — and a really good retailer — but how can we take this voice we have about fashion and luxury and extend the reach?"
Economic outlook: "We're still cautious. I don't think we're feeling optimistic yet, but we at least feel like there's going to be a real place for luxury in the future, which is good."
Big break: Katz achieved her career goal — to run a Neiman division — when she became its handbag merchandise manager in the late '80s. She made it the first big U.S. retailer to carry Prada. "I was so delighted. I never had any aspirations to do anything more than that. Maybe it fueled the rest of my career, but I never had a plan."
First luxury item: A Chanel jacket she bought in the mid-1980s. "It is one of the ugliest Chanel jackets I have ever seen, but it still hangs in my closet. It is bright orange with black grosgrain trim. When my son was little, we mothers always did the Halloween parties, and I would wear my orange-and-black Chanel. It comes in handy on October 31. I'm the chicest pumpkin around."
Favorite designer: "Oh, gosh, I'd get in trouble with other designers! I can't say. That designer will have to remain anonymous in this interview. I wear many, and I wear them proudly."
Inspiration: "Diane von Furstenberg is an extraordinary woman. She's modern. She's a mother, a grandmother, a leader."
Favorite Fashion Week? "Without question, Paris. The Chanel show is always amazing and over the top. It's inspiring. Lanvin has become one of my favorites as well. There's less showmanship in terms of production, but the clothes are so drop-dead gorgeous that you can't help but want to cheer designer Alber Elbaz."
Seeing stars: "I am a big Kanye West fan, and a few seasons ago, I met him at the shows in Paris. I blurted out something about his music being on my iPod. I sounded like the silliest person in the world."
Keep an eye on ... Maria Grazia Chiuri and Pier Paolo Piccioli, the two fast-rising talents at Valentino. "They are amazing. It's rare that young designers are not only talented and good at press but also interested in growing the business and learning from a retailer like Neiman Marcus. They have a real interest in the customer and how she thinks about fashion and luxury."
Favorite non-Neiman's shopping: Target. "I say it without any embarrassment: I love Target. They have a really beautiful way of blending inexpensive fashion with housewares and laundry detergent and dishwashing detergent."
E-bookworm: "I was never a book reader. I decided to try the Kindle a year ago, and I've read more books in a year than maybe in my lifetime. I'm obsessed with Stieg Larsson's Millennium Trilogy, the first of which is The Girl With the Dragon Tattoo. People who read these books, we're like alcoholics about them."
Wired: A self-proclaimed techie, Katz says she never travels without her armory of gadgets. She says she checks no bags ("I'm a very good packer"), but she won't leave home without her netbook, her BlackBerry, her Kindle, and her iPod Touch. "My son is 20, and he rolls his eyes at me as if to say, 'Mother, why are you carrying all that stuff?' But each has its purpose in my life."
Also obsessed with: Handbags. Ever since her stint as a merchandise manager, she says, "I've been a bag woman." How many does she own? "Oh, God. Maybe 100? And no daughters! Can you believe it? I hope one day I'll have a daughter-in-law who will get all of my handbags."
A version of this article appeared in the July/August 2010 issue of Fast Company magazine.