By  on July 3, 2014

NEW YORK — Michael Gould, the former Bloomingdale’s chairman and chief executive officer, wears his passion for the business on his sleeve.

So it was no surprise that when speaking candidly at the Fashion Group International’s “tastemakers” breakfast at the 21 Club here Tuesday, Gould spoke up for having concessions in department stores as he referred to the Bloomingdale’s 59th Street flagship as “a mall,” and described Nordstrom as “the anomaly of all” in its ability to sell price points spanning those seen at Neiman Marcus down to Macy’s.

Gould also addressed the question of whether a retailer must be led by a merchant, singled out the beauty business as something special on the selling floors and honed in on one of retail’s big challenges, stating, “We don’t lack for customers in the store. We lack for conversion and for really maximizing the unit sale going out of the door.”

Gould was interviewed by another one of the industry’s great veterans, Rose Marie Bravo, the former Burberry ceo and one-time competitor to Gould when she was president of Saks Fifth Avenue. While she got Gould to open up on several subjects, like what his last day on the job was like — he was succeeded by Tony Spring on Feb. 1 — Gould also fielded a few questions from the audience, including one on the impact Nordstrom will have on the competition and vendors once it enters New York City on 57th Street in 2018.

“I think the vast majority of people are going to sell it,” Gould said, albeit not without challenges, he suggested, posing the question: “What’s Armani going to do?” There will be pressures on Armani and other vendors from their current retail accounts in New York, whether it’s a store on Fifth Avenue, a store near Central Park, or another on Lexington Avenue, Gould said. “I think Nordstrom will make us work harder, everyone, because they are so big. Yet here’s this big [retailer] coming in a little different location. I think it’s going to be a challenge.”

The competition, Gould said, must respond by looking inward. “What are you doing with all programs you have in the stores today that makes going to Bloomingdale’s the most exciting thing in the world — a loyalty program, or relationships with sales professionals?”

On the role of concessions in department stores, Gould responded: “My mantra, if I was a manufacturer today, for the most part would be I want to be a concession, because I want to control my own destiny. I’m talking from a wholesale point of view. If I have the structure in the U.S., I want to control my own destiny. I think I could do it better. I can flow the goods differently. I am strongly in favor of it depending on what the store is, if the mission of the store is: how do I create the most exciting environment.

“As far as I am concerned, 59th Street is a mall. There are folks there that don’t like that phrase, they say it’s a store. It is a store, but it’s a mall. It just happens to be under the name Bloomingdale’s. It’s no different from Shin Kong Place in Beijing in my mind. It’s an exciting mall with one name, Bloomingdale’s, one DNA.

“As a retailer, the most important thing is to have the most exciting product for my customer, if Armani is a concession or not a concession. That’s the mission. Printemps, Galeries Lafayette, Selfridges are all anywhere between 65 and 70 percent concession. That includes the beauty business.”

Gould recalled his early days at Abraham & Straus, which Macy’s eventually took over, where he was on the executive training squad and became a sheet buyer, to underscore the relevance of concessions. “There was a post office, a drugstore, books, records, a notions department — all these little businesses. The problem now in department stores is no one nurtures little businesses.” However, “You walk through a Selfridges, Galeries Lafayette, you see all these little businesses. They are surviving because they are concessions.”

Concessions, he noted, “have a flow that is very different. Stores can staff it the same way with the same expertise, but there is a different flow.You look at that flow and say ‘that’s it,’” because more newness comes into the store. “It will be interesting to see how it plays at Saks,” which has a new president, Marigay McKee, from Harrods, where there’s a large concession business.

“I think Neiman’s has a bigger problem” though the Neiman Marcus Group is “so profitable in the businesses they already own.” NMG already sells all the big designers though some want to convert to leased shops and Neiman’s is considering it in certain cases, breaking from a long-standing business model that encourages sales associates to work all departments in stores to better service and outfit customers, and prohibits leased shops.

Here are excerpts from the conversation between Bravo and Gould:

Rose Marie Bravo: “How did you think Bloomingdale’s survived when so many department store nameplates have disappeared?”

Michael Gould: “I’ve always been a passionate believer that culture trumps all. I think the culture of Bloomingdale’s trumps all. Maybe 3 percent of the merchandise in the building you can’t find within 10 blocks. What’s unique about it? The people. I think there is a feeling that people could be something special in that organization.…Bloomingdale’s is a maker’s mark. A maker’s mark is a brand. It transcends. It’s community property. There’s something about the place that really embraces you.”

R.M.B.: “How important is it for a store to have a ceo that is a merchant in today’s world?”

M.G.: “I am not sure it’s mandatory. Like everything else, it helps. If you are going to be ceo, how important is it to know about finance, or about legal implications. My gift to life, aside from my family, is I always knew I wasn’t the smartest person in the room but I always surrounded myself with the smartest people.”

R.M.B.: “How did you keep it so fresh for 22 years? You always approached [the business] with so much energy.”

M.G.: “What makes Sammy run? What was your greatest fear? My greatest fear is failure. When your greatest fear is failure, you run very hard.” Referencing John Gardner’s essay on “Personal Renewal,” and the importance of keeping fresh by always learning, Gould added, “Life is this endless unfolding of self-discovery.”

R.M.B.: “You loved the beauty business. Tell us what you loved about it.”

M.G.: “I understood clearly that beauty gave the store a different level of energy, you create that energy on the first floor, that interaction. There’s an opportunity to get brands that wouldn’t sell you in other parts of the business. To me it was something that gave the store energy. With personal appearances, Halston when he was hot. Paloma Picasso. At the end of the day, fragrance is terrific. You can’t be two-faced and say it’s the future. The future has to be the color and treatment in any upscale store. If you look at the redo of Bloomingdale’s, it’s about color and treatment. I think there is a passion in this industry that is a little bit different.…It gives the store a different kind of beat, a different kind of energy.”

R.M.B.: “How were you able to walk that fine line of having a lot of the luxury players at Bloomingdale’s, some of the specialty stores had, yet you had the dynamics and excitement of a department store?”

M.G.: “I said to Jean-Louis Dumas [of] Hermès, ‘Give me a corner.’ He said, ‘No, you are a department store and I only want to be in a specialty store. Your opportunity is how do you become a specialized department store.’ If you look at Nordstrom, it’s the anomaly of all. Nordstrom can go from the bottom of Neiman’s to the top of Macy’s. How they do it is really remarkable from a price point of view.…I always said don’t try to be someone you are not. I can’t go into MAC and tell them I can do as much as Macy’s in Poughkeepsie. I can’t, but how can you have this balance…touching customers from 15 to 55,” with Chanel and Armani on the fourth floor for designer lines as well as the second floor for contemporary collections, and home lines stretching from Frette to the Hotel private brand, Gould said. “It isn’t even affordable luxury. It’s accessible. There’s this opportunity to be this place of excitement, a place that it is accessible.”

R.M.B.: “How do you know when it’s time to leave a job?”

M.G.: “Sometimes, someone tells you it’s time. I went to Giorgio and someone told me it was time. It was very hard leaving Giorgio. It was a culture and it was all about people.…I think I stopped growing. I had this incredible team. I did the same thing. What could be bad with this incredible team? Why would you want to leave. I stopped growing. I also knew the person I hired four years before, Linda LoRe, she was ready to be president.”

After 22 years running Bloomingdale’s, “Could I have stayed until they dragged me out feet first? Probably yes. It wasn’t about someone coming in and cleaning out 14 out of 17 people. Things will be different. Whatever the team wants to do, the team will want to do.

“At 5:40 that Friday afternoon, I did what I did every Friday afternoon. Sara [his girlfriend] came to the door. I walked out the door and went to Central Synagogue and that was it. I never looked back. It was their business to run.…Some people said I should have left at 64. I would have had different opportunities.” But nothing else, Gould, 71, added, “could have given me as much pleasure in those five to seven years.”

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