Last week’s announcement from Macy’s that Jeff Gennette was retiring and Tony Spring, currently the head of Bloomingdale’s, would be talking over certainly came as a bit of a surprise to the retail business. There hadn’t been any rumors or speculation about this and big secrets like this are hard to keep these days.
So it was big news and generally well received, but there are two really huge pieces of this news that nobody seems to be talking about. I don’t have the answers but at least I’m going to ask the questions that haven’t been raised anyplace else.
Why is Jeff Gennette retiring…and why now?
Gennette gets generally favorable reviews for his six years running Macy’s plus the time before that when he served as chief merchant under his predecessor Terry Lundgren. While the pandemic did Macy’s no favors, he maneuvered the company as well as anybody probably could have and his initiatives to bring its store count more in line with buying patterns, expand the Backstage off-price unit and clean up the merchandising assortment were all positive steps. Less certain is the Market small-store-format program and his Polaris strategy to remake the brand. Both remain very much works in progress.
Like the last transition, this one has a time frame around it as Gennette will stay on through February 2024. That’s a long lead time but similar to the last handover. Still it’s somewhat unusual in big American companies.
Gennette told the New York Times he “decided to retire because it was the right time for him and his family,” which seems reasonable enough. Gennette came out as gay while in college and while it was generally known within the company and the trade it wasn’t until last year that he really talked about it publicly. He has been with his partner for 32 years and married since 2011 when it became legal in New York. Together they have a 23-year-old daughter.
So, you still one has to ask, why now? He is only 61, practically a kid as corporate America goes these days and it doesn’t appear that Macy’s has any formal retirement age policy. Lundgren was 64 when he retired.
Macy’s recent performance wouldn’t suggest there was any pressure for him to move on either. While it’s had its share of disappointing results, the retailer has performed better than many of its competitors and, it’s fair to say, better than many people expected. Gennette must get the credit for that, as well as social programs he has led to bring more diversity to the company. Gennette has not talked about what he might do next and one hopes there is no other unseen circumstance impacting this decision.
So, the decision to leave and to do so now remains rather curious. Maybe between now and next February we’ll learn more but for now it just seems…well, odd.
Why did Tony Spring get the top job?
First off, Tony Spring is a great choice. He’s done a fine job leading Bloomingdale’s as CEO since 2014 and as a lifer he knows both this business and the overall retail business quite well. His combination of operational and merchandising strengths is something we don’t see enough of in retail where the accountants seem to be running far too many companies.
And Spring is yet another in a little-noticed line of top executives who come out of the home side of the business rather than apparel fashion. His predecessor at Bloomies, Mike Gould, started in home as did a surprisingly large number of others, including Allen Questrom, Mike Steinberg and many others. There is something about the home business that makes executives-in-training understand retailing better, some have said, as fashion often is dependent on factors out of a store’s control.
No, this question isn’t about Spring’s ability to do the job. He can. It’s about his coming up through the Bloomingdale’s side of the company rather than Macy’s. This is very unusual and I can’t recall anybody who ran this division ever taking over the entire parent company – whether it was Macy’s or its predecessor Federated. Usually Macy’s picks a Macy’s person as they did with Gennette, Lundgren and many of their predecessors.
The next level down at Macy’s – people like chief merchandising officer Nata Dvir, chief brand officer Richard Lennox and chief stores officer Marc Mastronardi – may be too young or without enough Macy’s gravitas to have been considered and it should be said that Spring has been an executive vice president of the parent company for a number of years.
Macy’s also doesn’t have a history of bringing in outsiders to run the company as some other retailers have. In fact many retailers seem to promote from within, be it Walmart, Costco or others so Macy’s is not unusual here. Still, it’s something we haven’t seen before in picking someone who is essentially not a Macy’s “guy.”
So, looking at some of the factors behind the Macy’s transition offers some answers…but not to all the questions.
WarrensReport 