Macy’s Lundgren gives up president title
When you think of Macy’s, you think Terry Lundgren. As chairman, chief executive officer and president, Mr. Lundgren has built Macy’s into a national powerhouse and kept department stores meaningful to many in the face of criticism that the format has become irrelevant. So what is the outside world to make of yesterday’s announcement that Mr. Lundgren has turned over the title and duties of company president to Jeffrey Gennette, Macy’s chief merchandising officer.
According to a release put out by the company, Mr. Gennette will continue to handle his current duties while overseeing Macy’s marketing, macys.com and overseeing Macy’s Private Brands group.
"Jeff Gennette is an outstanding merchant who has proven to be an insightful strategist and strong leader in our company," said Mr. Lundgren in a statement. "As our president, with the additional responsibility for Macy’s private brands, Gennette will have a total view of Macy’s merchandise assortment and marketing strategy — both in stores and online — consistent with our omni-channel vision."
Mr. Gennette has been the chief merchandising officer at Macy’s going back to 2009. He first joined the company as an executive trainee in 1983.
Mr. Lundgren refused to say whether the promotion of Mr. Gennette was connected to a succession plan at the company. "It’s a clear message that this is one of our top-performing individuals to give him such as huge responsibility," Mr. Lundgren told Reuters.
On the same topic, Mr. Lundgren said he has no plans to leave Macy’s. "When I do, it will be years from now," he was quoted by The Wall Street Journal.
Discussion Questions
What is your take on Macy’s announcement that Jeff Gennette is being promoted to president of the company? What will Mr. Gennette need to do to be successful taking on new responsibilities in addition to those he already has?
With all due respect I’m not sure that all the musical chairs that take place with department store executives really make that much difference anymore. The overall formats, philosophy, business model, product assortment, and customer handling seems to remain the same, no matter who has the corner office in retail chains such as this one. The only variables that seem to change here and there are acquisitions and the addition and subtraction of the store-counts. But let’s wait and see what happens here. Maybe we will be in for a remarkable surprise.
It sure sounds like succession planning to me, and I can foresee a next step where Terry Lundgren keeps the title of chairman but passes along the CEO role to Mr. Gennette. This is a recognition that many of Macy’s success stories over the past several years — while many of its competitors have struggled — are all about merchandising initiatives. Whether it’s the “My Macy’s” strategy (which microtargets merchandise content by store location) or the development of exclusive relationships with brands like Tommy Hilfiger, Macy’s has clearly breathed life into a potentially stale format.
I have never been a fan of one person holding the responsibility of all three titles in any major organization. While Terry will always be known for the remarkable turnaround of Macy’s, this is the right thing to do for Jeff who is the most logical person for the job. I also believe there is a lot more Terry can and will do for Macy’s, and this leadership change should give him the opportunity to grow the company one more time.
I think it’s important that a merchant has been named president. In the old tradition of Federated there was a split structure, with one leader in charge of merchandising operations and the other in charge of the money and other operations. This is the right move, and sends an important message – that in the middle of all this branding, product still matters.
I think Mr. Lundgren has done a spectacular job and is right to start bringing successors into stronger positions. He really has done what I thought was impossible – kept the full-line department store relevant in a world of specificity.
Two separate topics really: first, corporate governance – “splitting” of the Chairman, CEO, President roles, and the second on succession planning.
I’ve never been a fan of one individual sharing all three titles in large publicly traded organizations. There are exceptions and Mr. Lundgren’s visionary leadership has done wonders for rejuvenating the Macy’s brand.
From a succession planning perspective, this is about investing in the future stability of Macy’s and this move has to be seen in that light. Mr. Gennette will have ample time to establish his footing in his new role and will be mentored by one of the best. Overall, a good move for Macy’s and their shoppers.
Starting to put into place a succession plan. Mr. Gennette will have to ensure the integration of the brick and mortar stores and online to ensure his eventual rise, IMO.
Every successful organization has a succession plan in place. This sure sounds like the start for Macy’s. Time will tell when the duties are more streamlined, and Mr. Gennette has the power to make the big decisions. He has some big shoes to fill to keep Macy’s moving forward.
Luckily, Terry is smart and knows his team well. Jeff will do great. Macy’s is pure retail. Okay, what is pure? Pure retail is where the CMerch officer is involved in every aspect of the business. Real simple – real pure retail.
There are other retailers that drive on this same model, it was the past of retail and will be the future. Meaning: technology and other stuff have moved some shops away from pure retail. Some have failed or not done well due to this shift – especially in the fashion space.
Retail is simple; keep the model close to pure and you win.
Hats off to Terry for this move and congrats to Jeff.
My take on Jeff Gennette’s promotion to President of Macy’s is that it’s a deserved recognition, but it’s only Lundgren’s take on the event that counts … and Terry said he will be around years from now. That will give Mr. Lundgren more time to do additional things to make Macy’s successful.
Despite the PR value of this event, Mr. Gennette will still need to continue do those things that make Mr. Lundgren happy, for the other end of happy is woe.
It seems to this observer that Macy’s is willing to have it both ways. But will they? The 20th century footprint is alive and well in the 21st century, even with the weak economy. But there is a lot of e-commerce growth that needs a keen eye with a solid information technology understanding and capability.
The problem remains that there is only one Macy’s and for the present, it is cast into the turmoil of having two separate leaderships. There is no demonstration of multiple leadership having success of any kind in history. In fact it usually can be identified as a cause or at least the start of the decline. So for as long as there is a conflict between stagnation and change, Macy’s will continue to struggle with its entry into e-commerce and the 21st century. This is only a good day for the competition.
Terry Lundgren is young enough to continue to drive Macy’s for the next 5 years. Terry Lundgren is old enough, and carries the experience and wisdom to know that he has to have solid succession planning in place. That action will drive internal growth and inspire the entire Macy’s organization.
The best publicly traded corporations, as well as those that are pointed to as being the most admired, consistently have a CEO who puts a succession plan in place. Lundgren is doing it right.
Congratulations to Mr. Gennette! Well deserved! It is GREAT that Mr. Lundgren is thinking about succession. The continued forward progress of Macy’s will depend on the next generation and it is SO GREAT that a MERCHANT has been tapped for this important step forward.