When a retailer, fashion house or apparel supplier decides to change direction after losing faith in its chief executive officer or another top-level executive, the board almost never gives the executive a second chance.
NEW YORK — When a retailer, fashion house or apparel supplier decides to change direction after losing faith in its chief executive officer or another top-level executive, the board almost never gives the executive a second chance.
The reason is simple: There is no time for that when the future of the company is at stake.
That's when Hal Reiter steps in. Reiter, chairman and ceo of Herbert Mines Associates, is a go-to man when a company in the industry launches a ceo search. In recent years the company has placed senior level executives at Barneys New York, Neiman Marcus, Liz Claiborne, Pier 1 Imports, Gap Inc. and Yurman Designs, among others. Herbert Mines competes against rivals such as Spencer Stuart and Korn/Ferry International by offering a high level of service along with deep, industry-related knowledge. The firm also leverages its relationships with key industry executives.
"I think as far as HMA is concerned, it is perceived as the number-one executive placement company in the industry because of its history and its breadth and depth of knowledge," said Howard Socol, whom Reiter placed for the ceo spot at Barneys New York. "With [Reiter], he has the right-brain/left-brain qualities that companies seek in their own searches. He also has charisma. And he is not a lightweight for himself, and he is not a lightweight for his clients. He delivers."
Reiter, 57, a native of Oregon and a graduate of the University of Oregon and Lewis & Clark Law School, worked as a corporate attorney at Arcata Corp., which was a major printer of books, magazines and catalogues, and cut his teeth in the executive search business at Korn/Ferry in 1986. Reiter later joined private equity firm Butler Capital Corp. as recruiting managing director before arriving at Herbert Mines Associates.
A glimpse into his high-powered world suggests the intensity, sharp focus and depth required for the company to succeed.
Reiter's day begins with a read-through of the news in his office on Park Avenue here. After digesting The New York Times, the Wall Street Journal and industry trade newspapers such as WWD, Reiter dives into his agenda, which means working the phones, tapping sources, pitching services and presenting clients with top candidates.Each Monday, Reiter calls his staff into a conference room adorned with contemporary art. Managing directors and associates update Reiter on the progress of job searches, sales pitches and other company business. The doors to the conference room are always closed because confidentiality is an essential attribute for an executive search firm.
Last week, Reiter invited David Kim, a partner at private equity firm Apax Partners, to discuss what private equity firms look for in an executive. The presentation is part of Reiter's strategy to differentiate his company by offering his staff the chance to get insights into the industries the firm serves. Previous guest speakers include Burt Tansky, ceo of Neiman Marcus, as well as executives from the top apparel vendors.
As Kim spoke, members of Reiter's team listened intently, jotting down notes and asking questions. Kim said Apax wants executive candidates to possess strong leadership skills. The firm looks for an individual who is "well-rounded" and a clear communicator. Organizational skills are a must as well as someone who can execute a "big picture" strategy while also feeling comfortable crunching numbers.
The discussion with Kim and the staff was frank. Kim talked about executive pay packages and how they are structured to retain talent. He also discussed successful deals, and not so successful ones, "which are learning experiences for us," he said.
Later, in Reiter's office, which has a view overlooking Park Avenue, the chairman said companies not only want Herbert Mines Associates to provide qualified candidates, but also a bit of insight.
"They want to know if they are making the right decision," Reiter said.
The firm conducts about 120 executive searches each year and has some 70 active searches. The bulk of clients are companies well known in the retail and consumer sectors. They "have developed long-term relationships with us," Reiter said.
Reiter's path to leadership of the company began in earnest when he got a phone call in 1993 from founder Herb Mines when the veteran recruiter was looking for a successor. Mines had developed a niche in the retail and consumer markets. Reiter admits he didn't know a lot about retail when he joined the firm as president. "I thought Goldman Sachs and Saks Fifth Avenue were the same company," he joked.Reiter, who became ceo in 1998 and chairman in 2004, bought the company from Mines and developed a strategy to provide comprehensive service to maintain its top position in the retail market. The strategy paid off as the executive recruitment industry consolidated and became dominated by large companies with lower levels of service than HMA.
Reiter and his team are considered experts in the retail and consumer goods sectors. His contact list is filled with high-placed sources in the industry. Equally important is HMA's database. Every touch point with a candidate or client is recorded, including personal e-mail, cell phone numbers, information about spouses and families and other detailed notes. There are over 200 key words recorded as "candidate attributes."
When a client hires Herbert Mines Associates, Reiter's team immediately taps the database to find the right attributes, and then the firm assesses if the candidate would be a good fit.
Throughout the process, Reiter and his associates stay in contact with the client. The search could take as long as five months, Reiter said. Communication is key. Confidentiality is also paramount. "So when the phone rings, you answer it, and ask them to hold on for a second. And then they usually hear this…," Reiter said as he stood up, and closed the door to his office so it is clearly audible to a person on the phone.
Reiter said ceo's don't necessarily act like ceo's when they are job candidates. "It's an emotional experience," he said. "So they need to trust you. They also need to hear from us whether or not they should take the position. They need a guide."
The phone rang in Reiter's office. A client was on the line asking to see more candidates. Reiter passed along the information to one of his associates. Bob Nahas, a veteran recruiter and one of five managing directors at HMA, came into the office to go over a pitch to a client that was scheduled for the afternoon. It was a company that hired Herbert Mines Associates 20 years ago. The company called two days prior, and Reiter and Nahas will be making the presentation.
Then it's out the door for a lunch with Socol at Fred's in Barneys New York. The store and restaurant are buzzing. There's also some celebrity action going on: Sharon Stone is sitting next to Socol and Reiter's table. Over chicken and tuna salads washed down with unsweetened ice tea, the two men swap stories about friends and family, and Reiter's four children. There's also a bit of industry gossip. From the discussion, it's clear that Reiter is an industry insider."It's a challenging business," Reiter later said. "But we work hard, and play hard. We have a passion here that you don't see elsewhere. It's also a fun industry, full of interesting people."
Reiter was described by his staff as a strong leader. The respect is mutual, and Reiter said many staffers have been with the company for 10 years or more.
"A few years ago we had elected not to the sell the business," Reiter said. "I'm glad we didn't because we really have something special here."
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