Talking With…Terry Lundgren, Macy’s CEO

6 Comments | This entry was posted in Holidays, International, Marketing, Retail Companies

Usually our “Talking With…” series happens every other week, but I was so excited to share insights from this retail executive I talked Scott Silverman into letting me publish a special edition (hopefully you don’t mind!).

This week, we’re “Talking With…” Terry Lundgren, who started his career as a trainee with Bullock’s department stores in 1975 and is now the Chairman, President and CEO of Macy’s, one of the most iconic retailers in the world. Here’s what Terry had to say about Macy’s plans for the holidays, what he loves about retail, and the importance of business leaders listening to young company talent.

You’ve been in the retail industry since 1975, when you started out as a trainee with Bullock’s, a division of Federated. We know the industry has changed dramatically, but what remains the same?

When I was a buyer at Bullock’s in Los Angeles, I knew every store manager, every department manager and most of the best sales associates. I even knew the guys in the distribution center because I needed to make sure that my merchandise received priority placement on the delivery trucks, especially when I was running an ad in the newspaper, which was often. I could stay very close to the customer with all of these points of contact. But my span of control was only 20 stores and they all were within a 90-minute drive or a one-hour flight.

With our My Macy’s initiative, we are recreating a version of what we had 30 years ago – reduced span of control for district merchants and district planners to be in stores constantly, listening to the voice of the customer. This close connection to our customer was, and always will be, the key to success for any retail organization.

NRF’s back-to-college survey found that department stores remain the shopping destination of choice for 18-24 year-olds. Has Macy’s made a conscious effort to reach out to young adults?

Absolutely. We work hard every day to bring a high level of fashion and excitement to our juniors and young men’s businesses. We’ve also stepped up our assortments for young professionals just entering the workforce through brands like BCBGeneration, as well as through more premium denim and other products that appeal to this younger generation. We just launched Rachel Rachel Roy exclusively at Macy’s, which is targeted to this young customer and it is selling extremely well. We are reaching out to this customer through social networking, including Facebook and Twitter, as well as local fashion and culinary events. Our national advertising, which features design celebrities such as Sean Combs and Jessica Simpson who have product in our stores, positions Macy’s as a preferred destination for younger shoppers.

Can you share any thoughts on the upcoming holiday season?

Especially in this tough economy, we inspire customers during the holidays and encourage them to “Believe” in the spirit of the season. Last year, we asked children to bring their letters to Santa to any Macy’s store and place them in our special letter boxes. More than 1 million of them did so, and we contributed $1 million to the Make-A-Wish Foundation, making us the largest single contributor to this fantastic organization that grants wishes to children with terminal illnesses. We will have a similar focus again this year.

The holidays are a very special time in our society, and it’s a time when Macy’s really shines – beginning with the Macy’s Thanksgiving Day Parade. Millions of people around the world also watch “Miracle on 34th Street” at Christmastime. And this year, we are going to launch a new animated movie based on a true story of a little girl named Virginia who seeks to discover if there really is a Santa Claus. Macy’s is a part of the fabric of the holiday season in America and we take our role very seriously – not only as a place to shop, but also as a place to experience a magical time of the year.

When you received the Gold Medal Award at NRF’s Annual Convention several years ago, you talked about the importance of cultivating young professionals within the Macy’s organization and said you meet with a select group of young talent on a regular basis. What have you learned from those meetings and have you made any changes because of them?

I learn a lot each time I meet with a group of associates who are early in their careers with Macy’s. I work hard to devote at least 30 minutes a week to them, and it is among the most rewarding things I do. These individuals are brimming with good ideas and insights we can apply to our business, and we do take action on them. For example, the development and rollout of the BCBGeneration product for young career women, as well as the Rachel Rachel Roy launch, were directly related to a meeting of my “Breakfast Club.” The group told me we had a gap in our assortment for this younger working customer, which included our own trainees and assistant buyers, and we moved very quickly to fill it.

Even in the midst of a challenging economy, Macy’s continues to grow. Was the decision to continue to open stores in this environment a difficult one?

I’m going to be perfectly honest with you. We planned these new stores a long time ago so they were already under construction when the great recession began to hurt the economy. Our focus today is to drive higher sales from existing locations. That’s the objective of our My Macy’s localization strategy. But we also are pursuing a few select opportunities to open new stores where Macy’s and Bloomingdale’s are under-represented. There are very few new shopping centers being built or opened today in the U.S. In the future, we have a number of potential avenues for growth, including overseas, and we are opening the first international Bloomingdale’s in Dubai in spring 2010. But right now, our energy is being focused on increasing comp store sales. We believe there is a lot of opportunity to take market share and to grow Macy’s and Bloomingdale’s in the locations where they already do business.

To whom do you look for inspiration?

Internally, I look to our own people. There is so much energy and enthusiasm within our company today, in spite of the economic environment. I truly believe that we have the best and the most talented team in the entire retail industry at both Macy’s and Bloomingdale’s. We have always had a good team but today we have a spectacular team and they have a great deal of respect for one another. Our people have great ideas and a tremendous amount of passion for the business. I get excited and inspired every time I visit a store or talk to a group of our people.

Externally, I take whatever time I can to talk and listen to the senior leaders of other great American companies, especially those in consumer-driven industries. I am involved with a couple of outside organizations and have developed friendships with some of the most respected CEOs in the country. They always have a lot of great insights and I consider myself a student of business, so I just eat it up. I would like to think that they get a little something from my own insights and experiences at Macy’s and Bloomingdale’s.

Tell me something that’s especially vivid from your first days at the company.

I was recruited to Bullock’s in Los Angeles as I was graduating college at the University of Arizona. I had several other job offers, but what struck me about Bullock’s was the unbelievably talented people I met in the interview process and potentially would be working with and for. That’s what attracted me to retailing and what has kept me in this industry.

Retailing thrives on smart, aggressive, fast-moving people who know how to spot and capitalize on opportunity. You are responsible for your own P&L statement early in your career as a buyer or a store manager. I am very proud of the fact that Macy’s, Inc. is known for having the very best training programs, which in turn has attracted the best people in retailing.

Give us a snapshot of something attendees might hear during your keynote next month at the Shop.org Annual Summit. [Shop.org retail members, remember to claim your company's free pass to the Summit by August 14.]

I’ll be talking about the power of multichannel retailing – the convergence of stores and online. It’s something we’re doing very well at Macy’s. Our multichannel strategy mirrors the strengths of Macy’s – fashion, brands and excitement. I plan to talk about the opportunity to capture more of your customer’s open-to-spend.

You’ve spent more than 30 years in retail. What do you like most about this industry?

The constant change. You can’t stand still in retailing. You must always be innovating and pushing the envelope. The competitive landscape is always changing. The customer is always changing and evolving, and so must we. I like being challenged in this way. I just love this business. It’s a privilege to come to work every day and do something I absolutely love to do, even in this very difficult economic environment. We get our performance review every day at the cash register. I love the challenge because I know our strategy and our organization structure is right and we have the talent to win.

How do you unwind?

I enjoy spending time with my family and my friends. I also have always played sports. I love the friendly competition. These days, I prefer golfing – it’s easier on my knees than basketball. I enjoy exercising in the early morning and I’m also an enthusiastic spectator when it comes to football, baseball, basketball, tennis and just about every other sport.

If you could take five people in the world to dinner – past or present – who would you take and why?

Funny you should ask. At Macy’s, we have a drive this fall that encourages people to “Come Together” over dinner to raise funds for local food pantries around the country. Our plan is to contribute at least 10 million meals for those in need. In this spirit, I plan to have dinner with a group of those well-known celebrities whose merchandise is sold at Macy’s – Jessica Simpson, Queen Latifah, Mariah Carey, Usher, Martha Stewart, Emeril Lagasse, Tommy Hilfiger and Donald Trump – so we can set the example in raising funds. They all will be appearing in the Macy’s television commercial this fall to promote “Come Together” and to help eradicate hunger in America.

Finish this sentence: “I can’t start my morning without…”

Some kind of exercise followed by a Grande Black Pike Place (Howard Schultz will know what that means) and reviewing the previous day’s sales report.

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5 Comments

  1. Alexandra
    Posted August 18, 2009 at 11:05 am | Permalink

    I work for Macy’s and everytime I read articles or watch Macy’s webcast with Terry Lundgren I get inspired. Thanks for being such a great leader.

  2. Dorothy
    Posted August 18, 2009 at 1:01 pm | Permalink

    I joined Bullock’s in 1973 as an Executive Trainee. When Terry arrived on the scene, there was no doubt that he thrived in retail and would be a success. I had many corporate roles and in my travels, I would often find Terry in the stores, in the DC but always connecting with customers on the selling floor. We both were blessed to have Allan Questrom as our leader and Terry thrived under Allan’s guidance. Now that Terry is leading the charge to change the face of department store retail, he is the right man for the right job. Macy’s associates, Macy’s shareholders and most importantly, Macy’s customers are in good hands. Terry, congratulations on a job well done and for a job I know you will continue to do. (PS. Pikes Place is my first choice…must be part of our DNA!)

  3. Posted September 23, 2009 at 11:03 am | Permalink

    Many of you readers are most likely unaware of Terry’s unique way of inspiring the Future Leaders of Retail. Yes, there are basic presentations and motivating talks, but once a year Terry has an open floor discussion with students at his old home – the University of Arizona. This is an open dialog event and the students can ask anything. Terry is the executive and the mentor and the leader but during this session he becomes just a friend of the young people that will someday lead the business world (or our country).

    If you know an inspiring senior executive that is not doing open chat dialog like Terry does then toss them this as an idea. Once they do a session they will find it is worth the effort and very self inspiring.

    Help change our future today!

    T

    PS Pike Place Peak Grande is not available at Dunkin Donuts. I asked…

  4. elizabeth Marroquin
    Posted November 16, 2010 at 10:24 am | Permalink

    I am a Macy’s loyal customer since I came to the US. I read the article on last Sunday’s Star Ledger newspaper about Mr. Lundgren’s new ideas to keep Macy’s as one of the leading stores. I get in the mail coupons, which I really appreciate but I think it will save Macy’s lot of money to put the coupons on line in order for Macys’ to save paper and money.
    Congratulations to Mr. Lundgren for Macy’s success and even if I have never been able to see the Macy’s parade in person due to lack of a good spot, I know it is an event that very welcome in everybody’s home on Thanksgiving Day.

  5. Posted February 2, 2011 at 4:16 pm | Permalink

    I started my life’s work in the apparel working for Terry Lundgren.
    He was my Manager 2 times with Federated. The first was when I was his Assistant Buyer for Bullocks. The second was when Terry Promoted me to a Store Manager of Bullocks Wilshire La Jolla
    Our paths crossed again When Terry was Vice chairman Of Neiman Marcus and I was DMM and Vice President of Bergdorf Goodman Men. We then reconnected in 1995 when Terry Was President, Chief Merchant of Federated and I was working as Senior Vice President of Licensing, Leather goods and international for Kenneth Cole Productions inc.
    Terry has always been an amazing Leader. I knew that from the first time I worked for him. What makes him so special is a few things that i would like to point out.
    Congratulations Terry for always saying what you mean and doing what you say you are going to do!
    a) He does what he says he is going to do and executes to that Strategy.
    b) he keeps goals very clear for any Employee to understand, thus getting everyone either on the Bus or they leave.
    c) He puts the best people in the most critical positions
    d)He is very committed to whatever position he is in. He is not looking for the next Job , but rather at doing the best he can by leading by example always.
    a) i have know Terry since he was a buyer at bullocks and I can honestly say that his Character or acume for outside of the Box thinking has not changed since he hired me.

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