Let me start by completely disparaging the ridiculous and vapid comments made by Richard Baker following his defenestration at the hands of his hapless creditors. He said his actions in leading Saks Fifth Avenue and then authoring the company’s merger with Neiman Marcus to form Saks Global were intended to “save” the department store. As history has clearly revealed, Richard Baker could not run, let alone “save” a department store or any other retail enterprise if his life depended on it. Let’s move now from the miserable leaderless trainwreck that caused Saks Global to enter a Chapter 11 proceeding, something it may not ever emerge from intact, to a more valuable and instructive case study in effective leadership, notably, Bloomingdale’s.
Who are retail leaders with the most powerful legacies? And the answer is: Marvin Traub, Ira Neimark and Mike Gould.
Marvin Traub’s Enduring Legacy
I never worked at Bloomingdale’s, but during my seven-year tenure as a buyer at Federated Department Stores’ sister store, Abraham & Straus, I got to work, travel, and become friends with a host of their merchants. Then, later, as CEO of Federated’s Lazarus Stores division for yet another seven years, I got to sit next to Bloomingdale’s legendary CEO Marvin Traub during regular monthly corporate meetings. Traub became Bloomingdale’s CEO in 1978 and over his 22 years at the helm, he presided over the transformation of a run-of-the-mill, humdrum department store doing business in the shadow of the former Third Avenue elevated subway line into a world-class, world-renowned, retail phenomenon. Traub was an inspirational and innovative, if not downright brilliant, merchant leader.
But by 1991, Federated was caught up in the throes of a chaotic, financially catastrophic Robert Campeau takeover and merger with Allied Stores, and needed prompt expense remediation and profit improvement from all its operating divisions. Traub wasn’t as devoted to the changes that the beleaguered corporation required, so his reign ended.
Succession Success
Enter Michael Gould as Bloomingdale’s next leader in 1992. Gould began his career as I did at A&S and went on to be CEO of Robinson May Department Stores in Los Angeles and then CEO of the then-fragrance powerhouse, Giorgio. I didn’t know him at A&S, but I got to work with him when Lazarus helped launch Giorgio’s award-winning fragrance, Red. Gould’s placement as CEO of Bloomingdale’s involved an extremely challenging six-month overlap, an apprenticeship, if you will, with Traub.
What could have easily started as a disruptive and contentious changing of the guard instead became the start of 23 consecutive years of Mike Gould’s brilliant success as Bloomingdale’s CEO. Rather than reconstitute Traub’s leadership team, Gould focused efforts on outcomes that paid homage to Traub’s Bloomingdale’s legacy while consistently delivering better top and bottom-line performance. Almost everyone who was a member of the Traub team stayed as Gould added and mentored new members, notably, Tony Spring, who is now Macy’s CEO.
Gould’s leadership focus was on maintaining, if not improving, Bloomingdale’s brand equity. His overriding management strategy centered on placing individual and organizational behaviors and development efforts ahead of the theatrics that had been Traub’s stock and trade. He inherited a talented team, nurtured it, and managed to protect Bloomingdale’s investment in that team from the emerging incompetence exhibited by the Federated (now Macy’s) corporate leadership.
The Macy’s Saga
In 2014, after 23 years as Bloomingdale’s CEO, Gould handed his seat over to his principal mentee, Tony Spring. No shade on Spring, but now he has the thankless task of cleaning up over two decades of poor leadership and inconsistent, if not poor performance, at Macy’s. An ill-advised and overpriced acquisition of May Company and poorly executed nationwide banner conversions and consolidations, all resulted in years of a loss of focus on assortments, stores’ appearance, customer service and management of over 800 stores. There was also an incomprehensible failure to use Macy’s home businesses to its advantage during Covid, as well as strategically positioning and investing in the company’s emerging ecommerce efforts rather than merely using the macys.com website as a surrogate for weekly newspaper inserts. In comparison, Gould’s devotion to leadership was also Spring’s focus when he became Gould’s successor, and is the primary reason Bloomingdale’s thrived for all these years. Hopefully, Spring can now build a team at Macy’s and successfully run the business as he did at Bloomingdale’s.
Teaching Leadership
When I began teaching at Columbia’s Business School years ago, I took over a very successful retailing leadership course that Alan Kane had originated. I refocused this course on specific underlying elements of retailing leadership and fundamentals. I invited a procession of industry leaders to address my class each semester, as Alan Kane had been doing. In fact, over 18 years, 36 semesters and three separate retail courses, I invited hundreds of industry speakers onto campus. I primarily focused on individuals who were more than just industry celebrities; these were leaders who had something meaningful to share about themselves, their companies, their triumphs as well as their failures. Corporately produced PowerPoint investor decks were not welcome. I did host Marvin Traub on several occasions after he launched his post-Bloomingdale’s consultancy. But at some point, Traub became consumed with describing the past wonderment of Bloomingdale’s and how he had made himself famous rather than share how he had actually accomplished that. Each time he came to my class, he insisted on showing a video of a visit by Queen Elizabeth to Bloomingdale’s on a trip she had made to New York. My students were more amused than impressed.
By contrast, I regularly invited Ira Neimark, the retired Chairman and CEO of Bergdorf Goodman, arguably one of the founders of the modern luxury department store genre. He always spoke about the need to accumulate specific knowledge of the business and devotion to hard work as a basis of eventual success. He would speak at great length about the sanctity of assortment planning, inventory management, personal and personnel development and of course, customer service. When asked how he personally convinced the two Prada sisters to open a shop at Bergdorf’s ahead of Saks or Bloomingdale’s, he said he impressed them with his no-nonsense business acumen. Neimark was a preeminent leader whose willingness to share and engage with my students is now undoubtedly spinning in his grave over the Saks, Neiman Marcus, Bergdorf Goodman Saks Global trainwreck.
Leadership Legacies
In my opinion, Michael Gould deserves more recognition than he has received for Tony Spring’s success at Bloomingdale’s and his promotion to CEO of Macy’s. As for Spring’s successor at Bloomingdale’s, Olivier Bron appears to be managing an orderly and successful transition, well on his way to taking full advantage of the opportunities that the Saks Global demise has offered by way of additional luxury assortments and broader market coverage of luxury customers.
Spring now faces a similar challenge that Traub confronted: the need to build an excellent team, and, after finally cleaning up the mess he inherited, the need to reimage/reposition Macy’s as a store for the future. Political advisor James Carville once famously said, “Success in politics is all about the economy, stupid.” In a similar vein, success in retail is all about leadership, stupid!
Note: Listen to a candid conversation about leadership in TRR’s Retail Unwrapped podcast here.
