Recently, I’ve been crossing the paths of Mickey Drexler’s wanderings and meanderings, both figuratively and literally. It was just a day after I blogged on his ranting and raving about too many stores last week that I literally ran into him at the World Retail Congress in London. One of the climactic events during this absolutely quintessential global conference, attended by over 1000 retail leaders worldwide, was kind of a “fireside chat” between Mickey and his friend Sir Philip Green, CEO of Topshop, and excellently moderated by WRC Chairman, Ian McGarrigle. I use the words “fireside chat” because compared to their rather hyperbolic, sometimes confrontational, albeit colorful banter at the WRC four years ago, this chat might be described as almost a serious tome on the state of global retailing. Don’t get me wrong, there were brilliant insights and knowledge shared with the audience, however, I believe some expected more fireworks.
However, serious times require serious questions and answers. And these two giants of retailing didn’t disappoint. Insights into how to succeed in a world of unprecedented change and competitive congestion, or “…way too many stores, stuff, and designers,” as Mickey likes to put it, abounded. They both kind of framed the global issues and answers that were raised during the entire three-day Congress, and stamped their imprimatur on some of the key success factors, which echoed what I highlighted in an earlier blog last week.
The JCP “Moment”
But, I did want to share their answers to a question I posed regarding their thoughts on what JC Penney is trying to do, only because it is one of the controversies of the day, creating a litmus test of how any one person views the future of retailing, and these guys are eminently capable of offering important opinions. So, following are their paraphrased responses:
Talking generally, I think that if you try and make too many changes all at the same time, you scare the customer. Most people tell you that if you try and reinvigorate brands with too much change it is very hard to get the customer back. If you drop that much revenue in this very competitive landscape with everyone tearing at you, how do you get your customer back? That’s how the market has changed – peoples’ perception of value. They want steak, cheap, not cheap steak.”
The lessons that I’ve learned was when I was a young buyer at Bloomingdales that when I didn’t like a category and I didn’t buy it, all of a sudden I was running minus 10 or 15. My boss came up to me and said, “I think you ought to get back into that category!” Customers love consistency. They don’t want to be shocked; they don’t want to be surprised. What I really admire about what Ron is doing is that he is betting the company — now you have to have a really strong belief to do that.
I always believe there’s no harm in losing money, just don’t run out! You’re betting on a $17 billion business. Why don’t you take 10 stores and test it, why would you take a 1,000?
My advice to Ron was it will take a few tortuous years to turn around a business such as Penney’s, which in all fairness needed to reinvent itself. The fact of the matter is that most companies go on forever and then they lose their edge. I wouldn’t trade Ron Johnson’s job for anything in the world. He has an enormous task in front of him. I told him that it would be the worst thing ever, to be in the public eye at this time in his life with an American institution. I went through it in a small way at Gap and it was torture for a year and a half. When that stock drops by half, and you’re betting on yourself and the team, it isn’t fun. Let’s see what happens.
Yes, let’s see what happens indeed.