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The Marvin Traub Doctrine

The executive's 61-year career gives him a unique view of where retailing has been and where it's headed.

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With Estée Lauder in 1974.

With Estée Lauder in 1974.

Harry Morrison

Imelda Marcos shopping at Bloomingdale’s with Traub and Lester Gribetz.

Imelda Marcos shopping at Bloomingdale’s with Traub and Lester Gribetz.

Courtesy Photo

If anyone in fashion and retailing could say “been there, done that,” short of sashaying down a catwalk, it’s Marvin Traub.

His merchandise and marketing exploits and how he made Bloomingdale’s synonymous with what’s cool and trendy are well documented. He spent 41 years at Bloomingdale’s, rising from merchandise assistant up to president and then chief executive officer for 13 years until 1991. A year later, he formed the consulting firm Marvin Traub Associates. He capitalized on his extensive network of colleagues, contacts and friends around the world — several becoming clients.

Yet to many, Traub, who turns 87 on April 14, is more than just the former Bloomingdale’s ceo-impresario-turned-consultant. He’s a brand-builder, dealmaker, industry go-to guy, mentor, and the poster boy for anyone contemplating a second career when they could easily have retired.

RELATED CONTENT: WWD In Person: Marvin Traub >>

On the occasion of his firm’s 20th anniversary and his being honored with his wife, Lee, by the Martha Graham Dance Company for decades of support for the arts, particularly dance, Traub sat down to riff on the industry and share the wisdom of his experience. Though he’s more apt to reminisce with photos of all the designers and dignitaries he’s escorted through the B-way, here’s a less guarded Marvin Traub, tipping his hand on timely topics, professional and personal.

On the state of the retail industry and lack of verve…

“It’s not a tired industry as much as it has been a mature industry faced with new forms of competition. You have new forms of specialty stores. Obviously, Apple has come up with a different approach. You have Uniqlo out of Japan that has done exciting things. You have Zara out of Spain. H&M out of Sweden. It’s become more international. So some newness is coming. There is never enough.

“Macy’s is going through a period of major changes. I am really very enthusiastic with what Macy’s wants to do at Herald Square. Bloomingdale’s has taken a leadership role in building the contemporary business and in new concepts in beauty. There are some things going on. Is it enough? No. Stores have to examine how technology will change them and how they become more customer-centric. If there is one trend that is most important, it’s stores focusing on what their customers want. Also, the department store that learns that the combination of e-commerce and brick-and-mortar is workable is going to grow and survive. It’s going to change.

 

“It is clear, in the Eighties and Nineties, we overbuilt. Now we are not building very much, but productivity for many American stores is still not high enough. So over time, malls will change. Stores will close. Gradually we will get caught up. I think over time as leases run out, less productive stores will close to focus on the more productive ones. At the same time, there has to be an examination of the role of the shopping mall. That’s how they relate. Really, I don’t think the industry is in trouble. It’s not going away.”

On the relevancy of malls…

“Shopping centers — that’s an issue for both the landlord and the store. Value Retail [owner of luxury outlet villages in Europe] has a concept where they feel a responsibility for the success of the store. So they have merchants who work with the stores. They are very content to have leases that are largely percent-of-sales and the success of the store has a good deal to do with the success of the mall. So the store will either succeed or they have to shrink it or change it. There is much more of a partnership there. Does the landlord feel a responsibility for the success of the store? One would, if you tie the rental to percent-of-sales.

“Related [the New York-based developer] shares with Value Retail the feeling that the role of the landlord is to be a partner with the merchants. They are very active in the merchandising of their malls, which I believe in. We worked very closely with Related in the Middle East. I worked with Related on the Time Warner Center. When we first announced it, there was a great deal of skepticism as to whether we could make that [vertical shopping center] work on the West Side. That’s been proven.

 

“The other side of the coin is someone has to take a fresh look at what the mixture should be within the shopping center. Are there opportunities to bring in things from health care, to fitness centers, to restaurants, to theaters? In the Middle East, which is new to the shopping center business, you find at a shopping center you can go skiing, or you can walk through a giant aquarium or you have a skating rink. This all exists. People in the Middle East have built in really a large entertainment component to their shopping centers. I have been there. I have seen the crowds at the aquarium. I have seen the thousands of people who go skiing for the day. My children did it. There is no skiing in the Middle East. It’s 80 degrees in the winter. But they will rent their skis and boots. They have built a mountain in the Mall of the Emirates. Thousands of people take skiing lessons. It’s a great attraction. I don’t know if it makes any money, but it’s a great attraction. Dubai Mall has one of the world’s greatest aquariums. They also have a shop for children where they can simulate running a business. They love it. People are becoming more creative in what you find in the mall — both Americans and Middle Easterners. But there is an opportunity to be more imaginative in what one can find in a mall.”

On Ron Johnson’s vision for J.C. Penney Co. Inc.…

“It’s impressive and thoughtful, and presenting a major new strategy in total is appropriate. Eighteen years ago, I wrote a book [“Like No Other Store” (Times Books)]. It talks about retailing principles for the Nineties, and the final point, on page 383, is that successful stores are built upon two important foundations — carefully thought-through strategies combined with good execution. J.C. Penney has an ambitious plan. I have some concerns about their ability to implement the plan. With a $900 million savings, how are they going to maintain [proper] levels of customer service? With a $300 million cut in marketing, how will they continue to drive traffic? Can you really combine saving $900 million with good service, becoming America’s favorite store, everyday low pricing, improving the margins, and going from 400 to 100 brands?

“It’s clear that Penney’s needed major change. Some changes will work, some will not, and Penney’s will evolve over time to a somewhat different business. The vendors are all interested. Some are concerned about what their futures are going to be.

“The other clear issue is that customers are still very much value-driven, and will everyday low pricing — even though they have Friday clearances [every other week] — have some short-term impact on the business? What impact this has on consumers, one has to see.

“On the other hand, I feel Penney’s needs change and I applaud the effort to come up with some unique thinking. They have tried to look at all aspects of the business. There is so much involved. I suspect some concepts will work and some will not. The bottom line on Penney’s is, it’s ambitious. It’s going to take a long time to make all of this work.”

On how retailing is different today from 20 years ago and whether it’s as much fun…

“There is greater emphasis and pressure on performance. It’s probably made it more challenging. I think there was more freedom when I was running Bloomingdale’s. The merchants could make a lot of the decisions. The business was merchandise-driven rather than purely bottom-line driven. The fact that the stores dropped so many categories because they were not profitable is interesting. There was a time when one bought books, records, toys, sporting goods, lamps, appliances, televisions. Department stores have walked away from many businesses. Department stores are less appealing. Should they try to figure out how to get back into these businesses? I believe the answer is ‘yes.’ My daughter’s company, Adesso, is now supplying lamps to Macy’s. It’s turned out to be profitable for Macy’s and Adesso. But before, with many of these categories, department stores weren’t very good. They had competition from big-box retailers that were hugely professional and offered better value. Department stores ended up with poor margins and lost money.

“I don’t want to say there was more gut instinct before, but we had very strong merchants I had confidence in, that took great pride in developing product, whether it was Lester Gribetz for home or Mel Jacobs for accessories. It seemed people searched the globe for product. That was an important part of building Bloomingdale’s reputation. A great strength of Bloomingdale’s was our ability to do what we believed in, which made for an exciting store and was part of the mix of the store — even though doing a promotion of India or China or Israel may not produce a dollar-and-cent return. It produced an image that helped make Bloomingdale’s successful.

“I am not suggesting that people should be doing country promotions. I am suggesting people need to do different things. Bloomingdale’s today uses marketing very much. It’s a tool. Whether it’s what they do in the beauty area or an event, it’s different. Stores need to recognize that they need to differentiate themselves. How they do it is a challenge for management. There are different kinds of restraints and challenges, depending on the business itself. Bloomingdale’s today has a very strong reputation in contemporary fashion: the point is launching a new product. Bloomingdale’s is still a very good store to work with new fashion product and Bloomingdale’s merchants are seeking new things.

“I think it’s very easy to be critical [of retailing] and harder to come up with positive suggestions. In truth, when I started, there were probably 50 major retail department store chains. Now there are fewer than a dozen. With anything, it’s not great when you see all of these jobs that have gone by. New York used to have B. Altman, Sloan’s, McCreary’s, Abraham & Straus. I think there was a period after World War II when the population expanded and it was easier to be in the retail business. It was less competitive. Over time, it became more challenging, people moved to the suburbs. It became harder to run successful stores in New York City. It was a big family thing in New York. For Christmas, people took the children to meet Santa Claus and they took in the shops. There was a whole tradition. [Now] there is less excitement, less glamour.”

On retailing as change…

“Now there’s a big subject. I wrote 18 years ago that retailing is all about change. Technology is providing many merchandising tools that retailers have not taken advantage of. It fits two categories. [First], the knowledge of the customer — the ability to find out and track what each consumer likes to shop for, whether this customer likes to buy apparel at our store, or suits, or certain kinds of beauty. It’s an enormous tool, if properly used.

“The second thing is the use of communications devices, so you can communicate to the customer to help her find what she’s seeking. We [Marvin Traub Associates] are looking at technologies for when the customer walks into your store, the store knows that automatically and will have the ability to send messages to that customer about new products just received, or about getting a special gift if you do buy [certain] new products.

“We are working with a company that actually is doing this in four stores. One is knowledge of the customer, and two, it’s the ability to communicate with the customer. The iPhone is going to become the credit card of the future, something people can use for information and for ordering goods.”

On why women’s apparel has become such a difficult business…

“I think the way women dress has changed in the last decade or more. They feel better dressed with accessories. So that’s where you have a growing interest. Women collect shoes, handbags, watches and jewelry. The apparel part has become more of an accessory. It’s not that the apparel business has become so bad. It’s because these other pieces of the business have become more important. Think of how many watches people own, or shoes. Women are buying differently. Women’s apparel is a tough business. Look at a company like Michael Kors. It really started off as an apparel company, but it has become hugely successful with a major, greater focus on accessories.

“It’s hard to know if this situation is permanent. I don’t think that it’s a case of not enough women’s design talent. It’s just that lifestyle changes are changing the way people dress. It doesn’t mean people are not interested in new apparel, but these other categories have become more important. Stores are building bigger and bigger shoe departments and, by and large, giving bigger space for handbags. If one picks up the Sunday New York Times, probably the category that you see most advertised is watches. It would not have been that way 15, 20 years ago. Watches are no longer a functional item, but it is really a piece of jewelry, for men as well as women. “

On the industry’s lack of talent…

“One of the challenges is bringing talented people to the industry. One could always use more talent. There are young people coming along. Part of the problem with the industry now is that with consolidation, there are far fewer jobs as store heads than there used to be. People like to be the boss. But some people are doing something about talent. Terry Lundgren [Macy’s Inc. chairman and ceo] told me a couple of weeks ago he brought together some 22 M.B.A.s that they hired across the company to talk about what they were doing and really to encourage people.

 

“One of the things I am most proud of are the people I have trained. All of these people went on to run companies. Denise Seegal, Robin Burns — I always thought of it as a priority. The priority of any ceo is training a team, so as I identified people I thought were talented, I became very interested in their careers to try to help them grow. And I was always very proud of the fact that we had a team that all thought alike. Whether I was there or not, they would approach things. We were a store with a couple of billion dollars in revenues. It can’t be one person. It was a group of people that Marvin Traub believed in and helped train.

“You see on the window sill, that cow, that stuffed animal with the bell? At one point I appointed a team of people with Sue Kronick chairing, to make recommendations of what Bloomingdale’s of the future could be like. And at the first meeting, they gave me this ‘sacred’ cow and said that anytime anyone tread on a sacred cow, I could shake the bell. So it was part of training, to get these young people to think about what the future of the company could be.”

On going global, why it’s worked for some companies and not others…

“Frequently, it doesn’t work. One has to learn how to meet the needs of local consumers and, in many cases, you need a local partner. In many markets such as the Middle East, you need a partner, and selecting the right partner makes a huge difference. You really need guidance on what the local consumer wants. You need guidance on how to bring goods in. Al Tayer, which operates Harvey Nichols and Bloomingdale’s in the Middle East, has a buying organization so we can buy [the right] products. Overseas, most of the time the merchandise is run by concessions. That makes it harder.”

Aside from the obvious growth markets like China, India and the Middle East, what are the less obvious countries that retailers should be eyeing…

“The newest emerging market is really Brazil. It’s affluent, young and growing, but has high duties. The world is very different. It is very clear the enormous growth of China, India, Brazil and the Middle East will have significant impact on the success of people in the retail industry. I believe over the next 10 years, you need to have an operation that extends beyond simply this country. Retailers are expressing more and more interest. But they are a little concerned with the duties. Russia is an opportunity, but difficult. People are beginning to look at Eastern Europe, such as Poland. It has to be where the population and affluence are growing.

“I heard the other day that Vuitton is opening a shop in Inner Mongolia. Vuitton is one of the most powerful global brands. Mongolia has increasing wealth. Cashmere comes from there. There also seems to be a growing interest in Vietnam. Vietnam is becoming more and more a supplier of goods and I suspect ultimately retailing could follow.”

On establishing friendships with vendors and designers that Bloomingdale’s bought from…

“I think it is very important. If you talk to the Missonis, the Fendis, the Lauders, Ralph and Ricky Lauren, they all consider themselves friends. That was one reason I was very happy to have Lee [Marvin’s wife] travel with me on business trips. It creates more of a social atmosphere. I think it’s perfectly appropriate. One of the things that has helped my consulting business to be successful is having had these friendships over the years with people all around the world, and it’s also kind of a satisfying thing. I am always totally honest. I am a very transparent person.”

On which store launched Ralph Lauren first, Bloomingdale’s or Neiman Marcus…

“Ask Ralph. Ralph just left Beau Brummel and he came to us with the wide ties. The first product that I believe he has said publicly was the Ralph Lauren wide ties. Ties were generally $2.50. His ties were $5. We launched them in the tie cases in 1967 and then from ties, he went to shirts. And then he asked us to build a men’s shop and we did. Yup. Ask him.

“Bloomingdale’s certainly was the first to bring the Missonis and Fendis to New York. And Sonia Rykiel. We didn’t launch Yves Saint Laurent, but we opened the first YSL shop in New York.

“There is a discussion about who launched Calvin Klein and Donna Karan. I would say we were among the first. I wouldn’t say we were the first. When Calvin Klein wanted to go into the underwear business, he came to me and asked who made the Bloomies underwear. So he took the Bloomingdale’s underwear and went to our resource, changed the label and doubled the price.”

On your most memorable day at Bloomingdale’s…

 

“There were lots of highs, but one of the things that really intrigued me was taking the Queen of England through Bloomingdale’s. That was a rather historic moment. Here is the Queen, who had half a day in New York City, and I invited her to come. That evening at dinner on the Britannia, the royal yacht, I asked Prince Philip on how she came to select Bloomingdale’s. He said it came down to the Metropolitan Museum of Art or Bloomingdale’s. She probably spent close to two hours touring the store. I walked her through, introduced her to three talented American designers — Ralph Lauren, Donna Karan and Calvin Klein. They were just really starting out then. She was wearing a lime green Hardy Amies,” who, for half a century, was the Queen’s official dressmaker.


On your least favorite day…

“It was probably telling the Bloomingdale’s people that we were filing for bankruptcy,” in 1990. “I called a meeting on the main floor. I spoke over the loudspeaker and said I was going to survive and that we would survive. There was concern. Bloomingdale’s was making money. It was the parent, Campeau Corp., that got into trouble. It took on more debt than profit. Mr. Campeau had made me vice chairman of the company. I remember the night before I was at the 50th anniversary of the American Ballet Theatre at Lincoln Center. It was black tie, and I was called out to take a conference call. I left the ballet. We were heading toward financial troubles. We were not prompt paying bills.”

On never retiring, staying motivated, staying healthy…

“Look on the wall there. There’s an award from Harvard Business School they gave me a year ago. It’s the distinguished alumni award — not for what I did my first time around at Bloomingdale’s. It’s for my belief in second careers for businessmen. People may retire but they have much that they can contribute. I actually called Burt Tansky [former chairman and ceo of Neiman Marcus] and he said he was interested in joining the team. Then I have talked to or advised people like Dawn Mello [formerly Bergdorf Goodman president and Gucci creative director] and Phil Miller [former ceo of Marshall Field’s and Saks Inc.] as they have started their other careers. They have something to contribute.

“I’m just hugely fortunate at 86 that I come to work every day and I enjoy what I am doing. There are always new things. There is no one thing I feel I haven’t accomplished and would like to. I have been able to work and stay close to my family, which is hugely important to me. Last night, we took out my granddaughter and met her new boyfriend. This one is 25. We thought he was terrific and we are pleased she wanted us to meet him.

“I also still do things for the community. I am very involved in education. I have a chance to work with young people. I have a very good team here, and they’re much younger. I have friends all over the world who are both clients and friends. So next week I will meet with Alla Verber [vice president of Mercury, owner of Tsum, and mother of MTA client Katia Verber]. We help her. We help Eda Kuloglu, general merchandise manager at Al Tayer, bring new resources to Dubai,” where Al Tayer operates Bloomingdale’s in the Dubai Mall. “Working with people from all over the world is interesting and challenging.

“There’s a men’s collection, Massif, sitting right out there in the next room. We have stores come in and look at it. Stanley Tucker, who used to work at Burberry [and Saks prior] works with us in presenting that. It looks like Bloomingdale’s and some other people will buy it.

 

“Monday morning, I took a call from Pakistan on a jeans company. Then I talked to Scott Malkin [Value Retail ceo] in London. I had lunch with the president of licensing for Ralph Lauren. Then there was a media interview. Then I had dinner at the Union Square Cafe with my daughter, Peggy. Her business is very good. The next day, I had a visit with a lady from South Africa and talked with this fellow from Gieves & Hawkes in London. It’s typically a loaded day for me and that for me is fun. I love the retail business and I have so many friends doing interesting things. I also get pleasure working with Michael Gould [Bloomingdale’s chairman and ceo]. Mike and I have lunch periodically and we talk about some things Bloomingdale’s is doing, or what’s happening at Macy’s.

“I guess I enjoy the total business. At one point, I grew up in the home business. Then I became fascinated with the beauty business and cosmetics. I was always close with the Lauder family. Then I learned the apparel business. My mother was in the apparel business very much. She had a unique business. She was the fashion director at Bonwit Teller. She used to take care of Mrs. Kennedy, Mrs. Nixon. She was called fashion director, but she really ran their shopping service and had a very distinguished clientele. My father was the first Christian Dior licensee. He was the executive vice president of a company called Lilly of France. Both my parents were involved in the business and I grew up hearing about it.

“I am feeling OK. My knees are not everything they used to be, but that goes back to my being shot up in the war. I was laid up in the hospital for 15 months. On my last trip, my legs swelled up a little bit on the airplane so I am examining how much flying I should be doing. Since 2009, I have been to Dubai three times, Madrid, Barcelona, Florence, Milan, Munich, London, Brussels, Amsterdam, Athens, a couple of Greek isles. I have vacationed in the Dominican Republic, but for many, many years, we had a ski house in Utah. I loved skiing. I wasn’t good at it but I loved it. I was probably an intermediate. My wife and children were experts.”

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