Jeff Gennette: An Enduring, Challenging and Triumphant Macy’s Inc. Career
For Jeff Gennette it’s been an extraordinarily decisive year, both professionally and personally.
The 62-year-old chairman and chief executive officer of Macy’s Inc., and a 40-year veteran of the company, in March announced his impending retirement and was intimately involved in the succession planning. There was a whirlwind of promotions at the highest divisional and corporate levels, some triggered by his impending departure. There were several directional strategies disclosed, including the rollout of the scaled-down Macy’s format and the introduction of Macy’s private brand, On 34th.
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“Every year in retail is intense,” Gennette said. “This customer we all serve tells us everyday what they want and what they don’t want. How you react to that is always challenging. I wouldn’t say this year has been any more challenging or intense than others. We’ve got a strategy that we’re executing and a new one being developed.”
In a wide-ranging interview, Gennette candidly discussed why he stuck with retailing as a career for so many years, his most and least memorable moments at Macy’s, his seven mentors and his philosophy on leadership.
“The future of retail belongs to the brands that best blend art and science,” Gennette said. It’s about being customer-centric, tailoring to both the individual and different cohorts of customers, personalization and uniqueness, Gennette added, citing predictive and generative AI as tools for the future.
“If you stand still you are going to get mowed down. Retail can be an unforgiving business. There’s just no down time. Retail is detail. It’s never static. There is so much trial and error.”
He stressed the importance of maintaining a balance in life, between the personal and the professional. “I have created that for myself, though at times I had difficulty with it. Retailing can be so obsessive.”
With retirement, “You just know when it’s time to go. I am very much looking forward to spending more time with my family,” including his daughter Jude and his husband Geoff Welch, a retired graphics producer.
Asked what the next chapter is for Gennette, he replied, “I am not making any definitive statements yet. Stay tuned.”
Though retailing can be a grueling career, Gennette made it clear that it was all worth it, and that he knew early on that it was just the thing for him.
After the energy crisis in the ’70s, mopeds became popular and Gennette started selling them at Moped Motors in El Cajon, a suburb of San Diego. “I was 16, on commission, and I was pretty good at it. I learned how to match customer needs with the products we had. That got me into the idea of listening to the customer intently.”
In college, he majored in Victorian literature and creative writing, but he still had the retail bug, so he joined Macy’s right out of college. “I thought I would stay a couple of years and go to business school,” he said. That didn’t happen.
He joined the Macy’s training program in California in 1983, initially handling Fieldcrest towels, picking colors and such, in the buying office, and later becoming a sales manager for the young men’s “Tiger Shop” in the Stanford, Calif., store. At that location, young men’s was a weak business, had little space and ranked 20th among the 25 in the Macy’s West Coast division. Suddenly, when a line of Kingston Trio candy-striped, short-sleeve woven shirts arrived, 10 percent of the inventory was sold the first day it hit the selling floor. Gennette proceeded to reorder and edit, so in five months, the store’s young men’s ranking rose to fifth place. “I think that was the biggest thing for me — the connection with the customer. You make a change and see an immediate reaction. So I stuck with it.
“What I also appreciated about Macy’s at that point, and appreciate today, is the inclusivity of its culture,” Gennette said, pointing out that Macy’s was the first major corporation on the West Coast to join the battle against AIDS with the company’s huge Passport fundraisers.
As a gay man working at Macy’s, “To be out and open was not an impediment,” Gennette said. “It really gave me the encouragement and confidence to achieve.”
Gennette did leave Macy’s briefly for specialty retail jobs, including with FAO Schwarz, but they were short-lived. “I always kept coming back to Macy’s because I missed that cultural ingredient,” he said. Gennette remains one of the few openly gay CEOs of a major public company.
In different parts of the country, Gennette worked as a sales manager, a floor manager, a store manager, assistant buyer, associate buyer, buyer, divisional, general merchandise manager and director of stores. He became chairman of the former Bon Marché and Macy’s West divisions before they were consolidated into Macy’s as it centralized. He later ascended to Macy’s chief merchant, then president. He became CEO in 2017, and chairman and CEO a year later.
He’s always been intrigued by the complexity of retail and variety of skill sets required, be it merchandising, marketing, supply chain, technology, analytics, legal, and of course, consumer insights. His rise up the corporate ladder as he took on different assignments enabled him to experience different aspects of the business. “All those disciplines,” he said, “is what I love about retail. It’s a movable feast of highly enjoyable experiences that can take you wherever you want to go. Retail is under appreciated,” and there’s a false impression that it’s limiting. “We still need to increase the pool of talent.”
Another big reason for sticking with retail and Macy’s for so long were his mentors – and he cites seven.
“Betty Owen, a sales associate. She worked 20 hours a week. She took me to school,” figuratively speaking. “She taught me how to lead, how to prioritize,” he said.
Bob Jagger, a divisional in small electronics, taught Gennette when he was buying radios, how to forge “win-win” partnerships with vendors. Mike Krauter, a general merchandise manager for men’s and kids, taught Gennette how to recognize and deal with talent.
Bob Mettler, a former CEO of Macy’s West, taught Gennette about the power of maintaining a schedule, staying on time and staying on point. Janet Grove, a former head of the Macy’s product development, taught him to recognize the power of great product. “Most of our playbook for private brands as a growth vector is from Janet,” Gennette said.
Then there was Sue Kronick, a former vice chairman, who conveyed how to stay connected with consumers, and the value of intellectual curiosity for breeding good taste. “Sue was all about the latest in ballet, theater, travel. She had a wide aperture to cultural influences.”
His predecessor at Macy’s Inc, chairman and CEO Terry Lundgren, used to have an adage, “bloom wherever you go, be the best you can be,” at whatever job you have, Gennette paraphrased. “He gave me all the trust,” Gennette said.
When Gennette retires in February 2024, he will be succeeded by Tony Spring, the former Bloomingdale’s CEO and currently Macy’s Inc. president. Gennette credited Spring with being innovative and a strong leader.
Olivier Bron, formerly CEO of Central Group’s Central and Robinson Department Stores in Thailand, and before that, chief operating officer and director of strategy for French retail group Galeries Lafayette in Paris, in November succeeds Spring as Bloomingdale’s CEO.
Gennette has been widely respected for his leadership qualities and showmanship, and is credited with successfully navigating Macy’s through a profusion of challenges, including the pandemic, inflation, recession worries, the rise of Amazon and fast-moving shifts in consumer shopping behaviors, as well as pressure at times from activist investors. The company has a healthier balance sheet and has become more agile, but the stock is cheap, which some Wall Street analysts believe make it a good buy considering the upside potential.
So, what does it take to be an effective leader? “You’ve got to be authentic and optimistic,” Gennette said. He sees power in authenticity, in that it takes down barriers and builds trust, which is essential for productive work relationships. He believes having a diverse organization helps to better understand customers, he said.
“Recognize your own strengths and blind spots,” Gennette said. “Be customer-obsessed. All aspects of customers need to be brought to the fore. You have to ruthlessly prioritize what is important.” And a good leader, he added, must consider all angles of opportunities.
Significantly, Gennette and his team deserve credit for something that’s hard to measure — changing industry perceptions of the $25 billion Macy’s Inc. for the better. It’s a big accomplishment considering all the company has been through, and the cacophony from pundits preaching about the death of the department store.
During his tenure leading Macy’s, Gennette remade much of the company’s senior leadership, led headcount consolidations and dozens of department store closings, while resources were redirected to beef up the top 100 or so locations.
In 2020, Gennette introduced Macy’s Polaris strategy, a three-year plan centered on expanding assortments through online marketplace formats; accelerating digital growth; closing 125 department stores representing $1.4 billion in sales, with many of those already shut down; opening smaller-scale off-mall stores; boosting certain private brands into billion-dollar businesses; enhancing personalization and the loyalty program, and reducing costs. Macy’s in 2020 cut 2,000 positions and shut its dot-com headquarters in San Francisco and corporate offices in Cincinnati.
Gennette got Macy’s Inc. to adopt new formats for generating revenue, including the Bloomie’s and Macy’s off-mall, scaled-down specialty formats, and put the company on a course to gradually become less dependent on traditional department stores, which still represent the bulk of the business. The corporate hierarchy has been streamlined, leaving fewer senior managers with broader responsibilities and enabling more things to get done faster. About $900 million in annual costs have been cut out of the business.
Gennette led a cultural shift at Macy’s, reshaping buying, pushing for greater inclusivity in the hiring and merchandising, and integrating sustainable practices. In 2022, Macy’s Inc. launched Mission Every One, its social service program. It allocates $5 billion through 2025 to vendors, products and programs that help create a more equitable and sustainable future for the retailer.
The buying shifted to a “net cost model,” which involves purchasing merchandise up front at lower costs and reducing markdown allowances. It’s more conservative, and there’s built-in liquidity to respond more quickly to the trends, categories and brands that consumers are shopping.
“We can respond to what’s trending within a week,” Gennette said in a previous interview with WWD. “It was an adjustment and I’m not saying it hasn’t happened without some pain. But we have deep relationships with vendors. We want to build [our business] along with them. Markdown allowances have been dramatically reduced as we get reductions on the up-front costs. There are still some end-of-season reconciliations.”
There has been no single most memorable moment for Gennette at Macy’s, though he reflected on four, including 2013 when Ralph Lauren, Michael Kors and Calvin Klein all hit $1 billion in sales volume at Macy’s. That was four years after Gennette became chief merchant. “I put a real emphasis on power brands across many categories. We did that with great partnerships, great products, many exclusive, promotions,” he said.
In 2014, he was at a luncheon seated with Donald Trump in the Trump Tower. “I’ll never forget it,” Gennette said. “Macy’s was selling his suits, neckwear and dress shirts, and he was pitching me a Trump Hotel mattress line. He wasn’t going to take no for answer. But he stood up and started talking to everyone who was seated, saying that he had a great idea for a new mattress line. That was his response. But I stuck to my guns.”
Another memorable moment was when Lady Gaga came to Macy’s Herald Square flagship to launch her fragrance. “Whenever we did anything with Lady Gaga, her focus was on her fans,” Gennette said. “We had to include them with the fragrance launch so she could meet them.”
Of course, achieving the CEO/chairman role was the pinnacle. “Before that, every one of my jobs had been just about for three years.” This would be a much longer commitment. “I recognized the big shoes I had to fill. There was no next step.”
But Gennette also cited putting teeth into Macy’s DEI initiatives, in particular via Macy’s Workshop and Pathways programs, which provide education on retail disciplines, financial support and exposure for diverse companies that need support.
His most challenging times began in 2020. “I wasn’t prepared for volatility of the pandemic and supply chain debacle that followed,” he said. He had to temporarily close the store fleet and either furlough or let go thousands of workers. It wasn’t clear when they could return to work, he said. The number-one priority was to preserve cash and doing a much better job of controlling inventory, while forging forward on the fundamentals. “And then the pandemic bounce back was so much more robust than expected,” he said.
Still, “the company exited the pandemic stronger than when we entered the pandemic,” Gennette said. Today, Macy’s is leaner and more agile.
This year, Gennette was named a “Father of the Year” by the National Father’s Day Council. With his impending retirement, it’s a role he’s ready for and will have more time to embrace.
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