It’s a picture-perfect sunny, 70-degree day in the seaside hamlet of Newport Beach, Calif., where shingled beach shacks sit alongside multimillion-dollar homes on either side of a single-lane road at the end of Balboa Peninsula. Bikers and walkers stroll by and sailboats dot the marina.
This story first appeared in the April 23, 2013 issue of WWD. Subscribe Today.
It’s here where Henry Segerstrom lives, in an ivy-covered, white stucco-walled complex taking up a large corner lot with neighboring homes just a few yards away.
“I purchased this house in 1961 from Andrew Carnegie’s granddaughter, Mrs. McKenna. I was told she wanted to sell it on a Tuesday afternoon and by Thursday morning I had made her a cash offer,” said Segerstrom. “She didn’t want to sell it at first, but when I came over, I had [my son] Anton with me, who was still in short pants, and he gave her a little bow when I introduced them. I think that sealed the deal.”
Although it looks ultramodern with its curved white plaster staircase and glass wall fronting the water, the main structure in which he’s standing, Mrs. McKenna’s original 339-square-foot cottage, looked virtually the same in 1961. Even then, Segerstrom had an eye on the future.
At the time, he and his family (first wife Yvonne de Chaviney Perry and their three children, Andrea, Toren and Anton) lived in Santa Ana, Calif., and used the Newport Beach house as a summer home.
(Segerstrom’s marriage to Yvonne ended in divorce in 1981, and in 1982 he married arts patron Renée Mary von Issenberg, who died in 2000. He is currently married to the former Elizabeth Macavoy, whom he wed in 2000.)
Anton is currently a partner in C.J. Segerstrom, which owns South Coast Plaza; Andrea, a philanthropist, is married to David Grant, general manager of the center; Toren is not involved with the business.
RELATED STORY: Anton Segerstrom’s South Coast Story >>
Segerstrom was fond of sailing and has been a member of the Newport Yacht Club since 1959. He learned to sail on a 14-foot Lido boat, a skill he passed on to Andrea.
“Back then, half the houses were shacks and I bought up nine lots until the Eighties and put them all together,” he said.
It has been his main residence since then and is now filled with art by Calder, Mondrian and Picasso. Other similar white stucco structures, unified by architect James LeNeve have been added on to the 7,250-square-foot complex centered around a courtyard with a zen-looking pool and gardens.
“When he bought this place, there was a bright orange wall on one side that looked quite modern for its time,” said Elizabeth, his wife of 13 years. “My husband was always a visionary.”
Although he turned 90 on April 5, Segerstrom and his wife are showing no signs of slowing down. On the contrary, his memory is sharper than that of some people one-third his age, and his blue eyes still sparkle with mischief when he makes a joke.
Segerstrom cuts a tall figure in a navy pinstripe suit and red tie, while his wife coordinates in a red Michael Kors shift and matching coat.
Settling into one of the modern Italian sofas in the living room, Segerstrom begins to trace his life from farmer to retail real estate magnate.
“That encompasses a great deal because I started out with an agricultural background,” he said. His grandparents Charles Johan and Berthe Segerstrom had emigrated from Sweden in the 1800s with three children, then had six more in St. Paul, including Segerstrom’s father, Anton (the eighth of 11 children). They moved to Southern California in 1898, where Johan first farmed lima beans on 20 acres of leased land. Henry was born in Santa Ana in 1923. The entire family worked in farming, amassing nearly 2,100 acres in Orange County, where they became one of the largest lima bean producers in the U.S.
Henry attended Santa Ana High School. He had a brief brush with journalism when he was a kid.
“I was paid by the line and you had to write who, what, where, when and how. It was $1 a column inch,” he said. “That was big money for a kid in the Depression.”
He enlisted in the army at age 19 after the bombing of Pearl Harbor. He was shipped to Europe, where he was wounded by shrapnel from an explosion that took the index finger off his right hand.
“As they say in the military, you never hear the one that hits you,” he said. “You hear an incoming shell and determine where it’s going to detonate but I heard no sound, they just blew the whole thing. It was quite an experience.
“It was interesting.…I was taken out in the morning on a stretcher to the military evacuation hospital and, while I’m laying there, one of the medics said, ‘Look at that lucky son of a bitch. He lost his finger and now he gets to go home.’ I thought, ‘That’s pretty callous.’”
He received the Purple Heart for his service, as well as the European Theater of Operations Medal with Battle Star and the Good Conduct Ribbon, and rose to the rank of captain.
“One photo that I was always sorry I lost was the picture of me in my combat garb in France. We were told that you couldn’t take any photographs because you would reveal the identity of the battle organization if the Germans got it, so I only have one with my dress clothes on,” he said.
Segerstrom was sent to a hospital near Stanford University, where he underwent a series of operations over two-and-a-half years to treat his injuries and the bone-marrow disease osteomyelitis.
“I was very lucky in the fact that they put me in a hospital near Stanford so I was able to get on with my studies,” he said.
He then earned an M.B.A. from Stanford Business School in 1947 and joined the family firm, C.J. Segerstrom & Sons, in 1948.
“At that point, we had nothing but agriculture in our business. I enjoyed the farming business. Our operation had about 2,000 acres at the time between Santa Ana and Costa Mesa. You woke up at seven every morning and worked six days a week. But I like to say that we went from agriculture to urban culture in 10 years,” he said.
The Santa Ana Freeway had opened in 1950, connecting it with Los Angeles. The family was persuaded to acquire some commercial property in downtown Santa Ana, the dominant city in Orange County at that time, and built a seven-story building — the first in the city to have central plan air conditioning. (It is now the Orange County School of the Arts.)
The architectural firm they hired, Gruen Associates, was also working for Sears, which had opened up a store in nearby Buena Park. The retailer approached Segerstrom about building another one on the family’s land (in 1966), which then led to May Co. opening a store.
“We had what I considered at the time the powerhouse department stores. They were our anchors,” he said.
The behemoth that is now Interstate 405, also known as the San Diego Freeway, was still under construction, and Segerstrom remembers going to the first public hearing on the project.
RELATED STORY: South Coast Plaza’s Timeline >>
“This was 1967,” he recalled. “The startling thing is that we were open for a year without having the San Diego Freeway. Can you imagine that? It’s hard to believe there could be a retail center without a freeway. We thought it would never succeed because there weren’t enough people within a couple of miles. But in that first year we opened, our total gross volume was $25 million.”
(In 2013 dollars, that would be about $174 million.)
But Segerstrom was always thinking about the competition. Santa Ana had Fashion Square mall with Bullock’s. To the south (in the area that would later become Newport Beach), Fashion Island mall had J.C. Penney and Broadway. He was able to land Bullock’s in 1972.
“That really turned the corner for us,” he said. “We had 200,000 square feet of retail space and then the world fell apart with the conflict between Egypt and Israel and nobody was leasing anything, so I had 200,000 feet of empty space, but it all worked out in the long run. It was wonderful to have that inventory.”
After Bullock’s came I. Magnin, then Nordstrom and Saks Fifth Avenue.
“There has been such a turnover among the majors that it is just such a different world today. But working with SCP on a daily basis was such a revelation to me,” he said.
Segerstrom’s cousin Hal also helped manage South Coast Plaza until his sudden death in 1994, but it remains Henry’s “baby.”
“I put in most of the work, but that’s my passion — to such a degree that I’ve dropped my business cards all over the world,” Henry said.
C.J. Segerstrom & Sons also developed the Westin Hotel that is across the street from South Coast Plaza.
“When the 17-story steel frame [of the Westin] went up, it was the only thing over two stories in southern Orange County. People said, ‘Is Henry crazy? There’s no market for that.’ But we proved there was. It was one of the reasons why we became involved in the cultural growth of Orange County.”
Segerstrom believes that Costa Mesa will soon be able to support another hotel, though none of the deals have come to fruition yet.
So what else would he like to see built?
“Whatever is needed by the community. I am not a fan of building just for an inventory backlog,” he said. “You have to have substance when you make a building.”
As he kept an eye on the surrounding retail landscape, he noticed, “There were too many malls — though we don’t use that expression, we say retail centers. But there were too many retail developments occurring in Orange County to be supported by the population, which was growing at the rate of somewhere between 60,000 and 100,000 people a year. Everything looked alike in retail. There was no need to do anything but comply with the Broadway department stores’ plan for success, which was to have a store every five miles.
“There was no quality or imagination and I’m a great believer in thinking of what your customers want and what the community wants and you solving those needs. So I decided to do something very daring, I decided to open some stores at South Coast Plaza myself with my own capital.”
Segerstrom brought in the center’s first luxury retailers in 1975: Courrèges was first, then Yves Saint Laurent, Halston and Mark Cross followed the next year.
“I wouldn’t say that they were wildly successful, but they were successful,” he said. “It opened a whole new approach to retailing on a quality level, and with that we restructured our approach to searching out how we could bring in luxury business.
“The first concrete support we had was a commitment by Tiffany to open a store with us because no other luxury retailer had yet verified that Southern California, which was now 20 million in population, was a viable market.”
Today the SCP unit is Tiffany’s second-best performing store after New York.
“Our philosophy of serving the market is proven every day. We don’t define markets by political boundaries or economic performance. We’ve proven that with the run-up of tourism from Japan and China. I don’t think there’s another retail center in the world that comes close.”
Whenever he is courting a new retailer, he always asks where their top-performing stores are and strives to be at that level. When they were meeting with Cartier and its chairman said SCP could be among the jeweler’s top 12 stores in the world, Segerstrom recalled, “Elizabeth looked up at him with her big beautiful eyes and said, ‘We want to be in the top 10.’”
Segerstrom is fond of coining slogans and recalls 15 years ago when he was being driven from Frankfurt Airport to Baden-Baden, Germany. “I asked the driver, ‘Did you ever buy a BMW?’ because at the time we were driving a Mercedes. He said, ‘No, because I can drive this car for another 300,000 miles.’ That’s when I said, ‘Quality is a good investment’ and I’m going to take that back to our marketing department.”
He also attached the “international destination” to the marketing bullet points as well as the phrase “Only at South Coast Plaza.”
At this point, Elizabeth reappeared to announce that it was time for lunch — lobster and caviar salad.
“I thought it’s appropriate to have seafood because we are by the water,” she said, settling into the dining area of the open-plan main room.
“I know whatever this is can’t have a lot of mercury in it because my wife doesn’t like that,” said Segerstrom.
His favorite meal of the day is breakfast, and he is partial to pancakes. “I don’t care much for chicken, but I prefer beef,” he added.
Asked what he thinks the secret to his longevity is, he replied, “Fortunately, I have good genes.” His mother lived to be 99.
Over lunch, Elizabeth recalled their meetings with some of the artists who would become lifelong friends.
“I remember I met Richard Serra at the reopening of [the Museum of Modern Art in New York] and I thought, ‘I better go talk to him because my husband would like one of his pieces and I might never get to meet him again.’ Well, I went away to get a drink and they must have exchanged numbers because we get home and at 3 in the morning the phone rang and it was Richard,” she said.
RELATED STORY: The Segerstroms’ Art Project >>
Looking around the room, she said the Giacometti table was one of her favorite pieces, while Henry said that a steel sculpture by Alexander Liberman was his.
“I was at his house in Connecticut when I saw this half-hidden under a towel,” he said. “I asked him, ‘How much?’ Liberman said, ‘$25,000’ then said, ‘It’s not even for sale.’”
The artworks are shown off to great effect in the sparkling white, museumlike house, which recently underwent a freshening up that took nearly two years (the Segerstroms lived in another small beach house they purchased across the street during the renovations). But the intent wasn’t to redecorate. In fact, the Segerstroms have Dior to thank for the re-do.
“Mr. [Sidney] Toledano and I have become good friends so when he remodeled his store in South Coast Plaza, which cost several million dollars, he asked if we would host some of their best customers at a party at our house. It started out as a dinner party for eight people and we ended up with over 20, so we had to remove all the furniture. When we did, it showed where the floor was discolored by the sun so we said, ‘Why don’t we just start with the floor’ and it became like a snowball. Then we decided we had to change the ceiling lights so we ripped the ceiling out, then after that we were off to the races,” he said.
Segerstrom’s direct, unpretentious style is perhaps one reason why he was able to court and marry Elizabeth within three weeks of meeting her in New York, just after the sudden death of his second wife, arts philanthropist Renée Mary von Issenberg Segerstrom.
“When we first met, he told me he was a farmer,” Elizabeth said.
“Well, I was,” he countered. “I consider myself a farmer today.”
“And I thought you were from Orange, N.J.,” she said.
“But once she looked into my eyes, she realized that wasn’t the case,” he laughed.
Henry described his fashion-savvy wife as “a great partner.”
“She is a valuable part of our approval process and she’s also a good client,” he said. “Whenever we walk into a store I’m not sure if she’s checking out real estate or clothing.”
“New York was my home and I love everything about it, but I have learned to love life here, too,” said Elizabeth, who was a clinical psychologist in Manhattan when she met Segerstrom. The two also maintain a residence there. “I love that life is so fast-paced in New York, but you get a little comfortable when you live here, and you can make it as fast or as slow as you want. Here, in the off-season, I have the beach all to myself. It’s hard to beat that.”
For most things in life, Segerstrom likes to apply some key lessons learned at Stanford Business School.
“You should use ingenuity and good common sense and not be bound in standards. When I would interview Stanford grad students to work for our company I would tell them, ‘Forget about our restrictions and think outside the box.’”
What does he see when it comes to the future of his billion-dollar box, South Coast Plaza?
“We’re going to try to get a little more openness. If you build a box and shove somebody in it, they are going to want to come out. So we are going to take a look at those boxes and see if they could have a greater appeal than their present configuration,” he said.
Segerstrom is also considering ways to make “radical changes” in architecture for some of his most high-profile tenants.
“I will name three superheroes: Louis Vuitton, Chanel and Hermès. These luxury companies are [developing] some major stores now. They are building for the future and we need to do the same thing.”
It’s safe to say that Segerstrom doesn’t have much desire for hobbies, given his passion for retail and the arts. “I’m still searching,” he said.
What about plans to retire? “Why?” he chuckled. “I think of South Coast Plaza as my baby. As long as I can be a creative force in its evolution, I want to be involved.”