Remembering David Farrell

I never met David Farrell, in fact was never even in the same room at the same time. So my thoughts on his passing earlier this month are from afar, based on my observations of covering the retail market while he was the CEO of May Co.

And many people in the business, including many who worked for him, will tell you he was a damn good CEO. He was tough and demanding, which aren’t necessarily bad things when you’re running a multi-billion company…as long as you’re fair when being that way. I’ve heard it both ways on how he handled that so will have to pass on coming to a conclusion here.

So too on how the company he ran performed during this tenure. Here too there are two sides to this story. May Co. was probably the most profitable department store in the country in the years he was leading it. It was efficient, well managed and never seemed to have the drama, much less the ups and downs of competitors like Federated, Macy’s and some of the smaller regional players of the time. David Farrell ran a tight ship.

But was it too tight? His famous May Matrix that dictated the merchandising assortments across the multiple nameplates the company operated meant there was a very strict protocol on what those stores could carry. If you weren’t on the list, you weren’t in the stores and that was that. The very qualities that created the profitable efficiencies also had a stifling effect on buying choices. What you found in May Co. California was pretty much what you found in Filene’s in Boston…and everything in between.

In a way this retail homogenization is not much different from what happened when Terry Lundgren combined all the various former Federated and Macy’s divisions under one name – Macy’s – and standardized the assortments with a central buying office. The My Macy’s program was supposed to allow for regional differences but those inside at the time will tell you it never really worked the way it was supposed to.

If the May Matrix made for solid bottom lines it also suffered the same weaknesses as Macy’s found out years later. Sure, tastes and preferences aren’t as localized as they used to be but they still are…and were during Farrell’s time. It was tough for new lines to break into May stores and it’s fair to say that some existing brands inside the Matrix got a little lazy, knowing they were going to be bought regardless of how good that season’s collection was. One can make a case that the situation department stores find themselves in today with a lack of merchandising assortment and innovation can be traced directly back to Farrell’s Matrix.

The biggest loser of the May Matrix was most certainly Lord & Taylor. When May bought it in 1986 as part of its big deal for Associated Dry Goods, L&T was a better, upper-end store, on par with Saks Fifth Avenue, Bloomingdale’s and some other nameplates that no longer exist. As part of the Matrix, its merchandising assortment got dumbed down…and then dumbed down some more and before too long it was just another department store without much point of differentiation. Maybe it wouldn’t have survived regardless of its strategy but when Federated bought May in 2005, L&T didn’t come with the deal and was spun off, being passed around a few times until it eventually went out of business in 2021.

There is no alternative history parallel universe to say what would have happened to L&T, much less the entire May Co., had Farrell pursued a different strategy when he ran it. With so many department stores long since gone, May could have just been another name on that list. Perhaps you can say Farrell was smart enough to know the best deal for his business and its shareholders was to sell to Federated. I would say that, even if it meant jobs and fabled store names would be lost in the process.

Through it all, he had many fans, as well as many detractors, both during and after his career at May Co. He appears to have done many good things outside of May that are to be admired. Things are rarely black or white and so it was with Farrell.

I never met David Farrell. But I wish I had.