In a move that surprised no one, Macy's chairman and chief executive officer said Monday that he will leave the company on Jan. 31 1995, after it consummates its merger with Federated Department Stores in December.
He will receive severance of around $13 million.
Ullman, the highly confident, hard-working manager struggled unsuccessfully to keep Macy's independent in a tough battle with Federated.
Leading Macy's through its reorganization, Ullman took a merchandising-driven company into the computer age by installing new technologies to track and reorder goods. He tackled shortage and operational problems, cut much debt and slashed the staff from 70,000 to 50,000.
He is also credited with implementing the store's buyer-planner system and keeping cash flow at or above plan for the last 17 of 18 months. Sales, however, have continually been below industry standards.
Despite his seemingly boundless energy and cool demeanor, Ullman, along with his team of planners, failed to convince creditors that the chain had more value as a stand-alone company. Federated put the nail in the coffin by outbidding Macy's, valuing the bankrupt company at $4.1 billion, against $3.9 billion by the Macy board.
When the companies announced a merger agreement July 14, Ullman was named deputy chairman of the combined company to assist in the transition. In the weeks that ensued, he tried to negotiate a top-level position with longevity at the combined $13.5 billion chain, sources said.
One source said he wanted to be president, a post held by James Zimmerman, who is considered Allen Questrom's right-hand man. Questrom, Federated's chairman and chief executive officer, offered Ullman other responsibilities, reportedly involving SABRE and credit operations, which Ullman wouldn't accept.
"Questrom wasn't about to turn his back on his number-two guy," said a source close to the situation.
Ullman declined to comment on those reports but said he was "pleased to be considered for the senior leadership."
"Ullman's departure is nothing unpredictable," said a Federated source. "With three men steering the ship, it would have become lopsided."
Ullman's severance is based on a court-approved agreement entitling him to a percentage of Macy's value above $3 billion in the event of the change of control of the company. Federated's bid valued Macy's at $4.1 billion.Ullman, who is 47, is expected to help in the merger transition. He will continue to be a Federated director until May 19, 1995.
"My mission at Macy's is nearing completion," Ullman said in a statement. He added that his team successfully turned around Macy's, which has been in bankruptcy since January 1992.
"While our team would, of course, have been interested to see how Macy's would have fared as an independent company, I am confident that the franchise is in excellent hands and that the combined Federated/Macy's has a very bright future. Accordingly, after considerable thought, I have concluded that this is an appropriate time for me to take on new challenges."
Ullman said he hasn't given much thought to his plans but noted he would consider options in retailing and other industries.
Other ranking officials from Macy's corporate office, which is being dismantled, will soon leave. Among the imminent departures is Roger Farah, Macy's president. Farah came on board in July and had been Ullman's hope for reviving Macy's merchandising. Reportedly, Farah will leave before the end of the year and will not be offered a position at Federated. He will glide home on a $14 million parachute for a few months work.
As reported, Arthur Reiner, chairman and ceo of Macy's East will leave Oct. 16, taking home about $2 million.
"The fact that Ullman is leaving won't mean that all of his work will become unraveled," said one former Macy's official. "Federated has tremendous respect for the buyer-planner system, which he initiated." Under that system, buyers shop the market and select merchandise, while planners shape the size of the buy and how it gets distributed to stores. It relieves buyers of much of the time-consuming traveling to store branches.
"He's been a very effective leader, and he worked like a madman," said a former Macy's official.
Ullman began his career as an international account manager at IBM, where he was responsible for consumer and retail clients. He later was vice president for business affairs at the University of Cincinnati, his alma mater and in 1981, became a White House Fellow, serving as executive assistant to the U.S. trade representative.From 1982 to 1986, he was executive vice president at what was then Federated's Sanger Harris division. It's since been consolidated into May Department Stores' Foley's division.
From 1986 to 1988, he was managing director of Wharf Holdings, a diversified holding company in Hong Kong, where he was discovered by Edward Finkelstein, his predecessor. Finkelstein brought him on board in November 1988 as executive vice president to shore up Macy's balance sheet. After a couple of promotions, he became co-chairman and co-ceo in April 1992, deposing Finkelstein just two and a half months after the company went bankrupt.
"Finkelstein brought him out, and Ullman pushed him out," said another ex-Macy executive.
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