Gregory J. Scott, chief executive officer of New York & Company Inc., has a flair for the unexpected.
At meetings with field leaders and senior management, “It’s like if I want to get people excited, I do a headstand on stage. It’s my out-of-the-box moment. I can do headstands and handstands,” Scott said.
He dyed his hair bright blonde and let his beard grow to do a segment for the reality TV show “Undercover Boss” and had some rocky times at Bebe Stores during the course of two stints, first as head of merchandising and then, following Arden B where he was president, he rejoined Bebe as ceo at the age of 40. He was ceo for five years until 2009 when he got fired despite the company reporting an 8 cent profit that quarter. As a buyer at Macy’s and Ann Taylor, he amazed colleagues with some outsized orders on styles his gut told him to gamble on.
“My first bet was on a Charter Club interlock knit turtleneck for Macy’s West in the late Eighties. Everybody was buying like 10,000 or 15,000 units. I said we’re going to buy 50,000 units of that turtleneck, and Macy’s East and Macy’s South thought my boss and I were crazy. The divisions were very competitive. They didn’t want you to win. But that knit turtleneck sold like crazy. It sold out. It was so successful, it gave us the confidence to buy a lot of polos the next season.”
When he joined New York & Co. initially as president and six months later becoming ceo in February 2011, he continued his appearances on Home Shopping Network, selling a sportswear line he developed after leaving Bebe in 2009.
“People in the company didn’t know me yet and said ‘Who is this weirdo? They saw me on HSN and said, ‘That’s our boss???'”
Today, Scott has another out-of-the-box moment. He’s ringing the opening bell on the New York Stock Exchange, to broadcast the renaming of the corporation from New York & Co. to RTW Retailwinds, which became effective Monday. The name change signals the corporation’s reinvention from a monobrand to a multibrand “lifestyle” retail platform. The stock price closed Monday at $3.50 and has gone from a high of $5.55 to a low of $1.96 in the past 52 weeks.
“We are looking at what the other opportunities are outside of New York & Co.,” Scott said.
A priority is Fashion to Figure, the $20 million plus-size online and brick-and-mortar retailer, founded by the grandsons of the late Lena Bryant of Lane Bryant and purchased out of bankruptcy by New York & Co. in November 2017.
“Could that business be $150 million to $200 million — yes,” Scott said. “The question is how fast can we ramp up the digital and how fast can we ramp up the brick-and-mortar,” from the current 11 stores. “We’ve never been strong at plus-sizes. I don’t think we could do it [effectively] without Fashion to Figure.” The division has tapped actress and singer Danielle Brooks as its first “brand ambassador” celebrity tie-in, beginning this holiday season.
Last August, the company struck a multiprong, multiyear agreement with Kate Hudson. The “Almost Famous” and “How to Lose a Guy in 10 Days” actress will serve as ambassador of New York & Co.’s $225 million Soho Jeans business, and a Kate Hudson ready-to-wear brand, yet unnamed, will be developed.
“With Kate Hudson, what’s different is that the line won’t say ‘exclusively sold at New York & Co.,” unlike New York & Co.’s Eva Mendes dress collection and Gabrielle Union’s collection, Scott explained. The Kate Hudson line will be sold on her own site, the New York & Co. web site, at New York & Co. stores, and additionally, “our hope is her site creates a demand with other consumers so we could possibly wholesale the collection and open pop-up stores as well,” Scott said.
After more than three decades in the industry, the 55-year-old Scott still finds it fun.
“I always knew I loved retail,” Scott said during a wide-ranging interview at New York & Co. headquarters on West 34th Street in Manhattan.
Scott later became Macy’s West’s buyer for the Charter Club private brand, often visiting the corporate division at 11 Penn Plaza in New York. “I learned product development, how to make the garment, how to cost the garment, how to develop the product, which was very fortuitous as I moved on through my career. If I was just buying off people’s lines, I don’t know if I would have the ability” to advance.
After Macy’s West, Scott moved to New York, worked for Henri Bendel for a year, and joined Ann Taylor when Sally Frame was ceo, Joe Gromek was head of merchandising and Kay Krill ran sportswear.
“These were very important people. That’s been a big part of my story. I’ve always had amazing people to learn from.
“Ann Taylor was really my first venture into specialty. It allowed me to understand the benefit of going direct. In those days, specialty was on fire. If Ann Taylor didn’t have a 10 comp, it was bad. You could create product and the consumer loved almost everything you made. Those were the heydays of specialty retail. Department stores were like, eh, and specialty retailing was coming up. You could do no wrong. It was a super fun time in retail. There was not a lot of consumer intelligence.
“Today, the customer tells us what she wants. The amount of consumer data that we have today give us so much more intelligence. The speed of intelligence we are getting from digital is making it thrilling again. You can absolutely get early reads about what is selling, get back into the pipeline much faster than before.”
At Macy’s, he learned he had “an innate talent for picking product — figuring out what was going to sell. I still believe that talent is innate. [But] it can be developed. It can be trained. It can be honed,” Scott said. “But to have that innate talent makes it much more thrilling. I love stores. I love selling and seeing things sell. My favorite thing is knowing what’s going to be the best thing every woman wants and being able to buy it at a great cost, market it, put it in a store and be in there and watch people shop.”
When he decided to quit Ann Taylor to join Bebe, Frame called him into her office. “She said, ‘You should leave, not because I don’t want you but because you are going to understand the Bebe customer more than anybody I know.’ She knew I always pushed the envelope on fashion,” and she even created a “hybrid” department for Scott to bring products to the business that weren’t being developed in-house. “I was in the market. Nobody was doing this. I said guys, this is a big opportunity, and Sally said ‘I understand, but is it for the brand?’ She created ATX. I became the merchant. I didn’t work through internal design. I went to the market,” including Laundry, to supplement Ann Taylor’s familiar wear-to-work and casual offerings.
Now at the vertically structured New York & Co., Scott will encourage his teams to utilize the market and as a source of product it represents around 10 percent of the business.
As far as picking products and placing those big bets, “I’m making less of them,” said Scott, explaining a major difference in responsibility from his buyer years. “I’ve got great teams running merchandising and planning and allocation, but I still love the thrill of it. I always say to people, if you put 15 dresses up on a wall, for some reason, one dress pops off that wall for me. It’s like 3-D. It’s like you look at the wall and see nothing else but that dress, which becomes a focal point for the next season. That’s the innate piece.
“I don’t know if you can teach the 3-D piece. But I know you can teach people how to assort, how to buy, how to allocate, how to run a business correctly, how to chase bestsellers. How you move it through the organization. You can do all of that. The one thing I’m sure about, even 33 years later, is that you can’t teach how to pick the number-one product. There is a lot of art and a lot of gut to that, but you can totally teach how to make it a big idea.”
Last year, New York & Co. turned profitable, reporting net income of $5.7 million, from a 2016 loss of $17.3 million. Comparable sales rose 1 percent; total sales were $926.9 million. For the third and fourth quarters this year, the company expects comparable sales to increase in the low single-digit range, leading to improvements in operating results.
In 2010, New York & Co., which in 1995 was renamed from Lerner New York, “the brand to most people meant nothing,” acknowledged Scott, though there were still some loyal shoppers.
“When I came here, my first meeting was Q2 2010 and the cfo said we are going to lose $50 million this quarter and we only have $20 million in cash. All my research did not tell me that was happening.”
Then, after pre-releasing the dismal results, Scott recalls his first investors’ meeting for New York & Co. “An investor looks at me and says, ‘This sucks. This is horrific. Why do you even exist?’ I didn’t have an answer to that. But you better believe in the next five months I got an answer — that we exist to make women look good and feel great and because we have a place in their lives.”
Quotables from Greg Scott
On Manny Mashouf, founder of Bebe: “At my first meeting with Manny, he sits me down and says, ‘I want to talk about triangles, what each point of the triangle means and how that influences your life, my life and fashion.’ For the next two hours, I talked to Manny about triangles. I thought, ‘Oh my gosh, what did I get into?’ There was a point to discussing triangles but I can’t remember what it was.…It was my first time I worked with an entrepreneur, a founder. The art of negotiation with Manny was always a big deal. He was all about knowing every single detail of everything in the business and how to negotiate the best price possible. When you work with a founder, they want to know how much you’re spending for a paper clip. I learned how to construct a store, pick real estate, manufacture a shopping bag. That benefited me in a huge way. It allowed me to understand a P&L [profit and loss] and affect every line item. You had to know the cost sheet inside and out. I learned about the brand and how to keep in your lane. We were sexy before sexy was sexy, our customer was suiting with a sexy appeal; Rose McGowan was our celebrity at the time. We started with 40 stores, doing $40 million. When I left we had 320 stores, doing $800 million. Manny had crazy visions that were dead on. He needed someone to take that vision and apply it to reality. Manny would say things like suiting is dead when it was lion’s share of the business. So we buy jeans, and he was so right, the suiting trend was dying, jeans and a jacket were starting to happen.”
On his worst day at work: “It was when New York & Co. stock dropped 40 percent in one day. We had an unbelievably horrible quarter. The stock in the after hours was down 20 percent. The next day it was down 40 percent. I had never seen anything like that. We went to $1.50. Everybody thought we were going bankrupt and that we were not doing what we promised. How was I going to get the morale of the company up? How am I going to get people to believe in the story? And how are we going to make some changes quickly? The second worst day was getting fired from Bebe. I was never fired before. It was 2009, the world was coming off the Lehman debacle and the board and Manny decided they could do it better. We still made eight cents that quarter.”
On the weather: “I don’t let anyone talk about the weather. When you had a bad quarter, it’s tough. I never think it is the environment. It’s always hot somewhere and always cold somewhere. Granted, weather can influence business, but I don’t want to use that as the excuse. The excuse is maybe we should have more wear-now assortments. Maybe August isn’t about pre-transition anymore and it’s still summer. I won’t let anyone say the word ‘fall’ until after Labor Day.