Marigay McKee is out to teach Saks Fifth Avenue — and other retailers — some new lessons in luxury.

This story first appeared in the May 5, 2014 issue of WWD. Subscribe Today.

The transplanted Brit, a former teacher-turned-retailer, who is now president of Saks, is shaking up the New York retail scene, with her impact to be most noticeable beginning next year. Coming up: new labels on the selling floors and innovative events, including one in Central Park, and strategies to differentiate the Saks experience.

The retailer is also seeking to open a full-line location in lower Manhattan, planning several sites in Canada and has a $250 million renovation scheme at its Fifth Avenue flagship in the works. Yet even with the full plate of projects, McKee, speaking Thursday night at the new Manhattan campus of Glasgow Caledonian University, stressed Saks is undergoing “an evolution, not a revolution” and that the company would “cautiously invest on a journey to become America’s foremost luxury retailer.”

For McKee, the former chief merchant at Harrods and now an honorary professor of GCU, it was her inaugural master class titled “The Business of Luxury.” She tackled a spectrum of subjects: the future for Saks, the evolving luxury business, her passion for department stores, how ladies in New York differ from the ladies of London and how she was dubious when she got the call for the Saks job last year. She also discussed her management style — aggressive and transformative — and how people perceive her.

She acknowledged she’s been called crazy lots of times, that she doesn’t scare easily, that she was wearing 10-year-old Azzedine Alaïa shoes, albeit restored, along with an Alaïa dress, and that at Harrods, where she was chief merchant before taking the Saks job, chairman Mohamed Al Fayad gave her free reign.

“He allowed me to play in the ‘sandpit’ to my heart’s content. I don’t think many chairmen or leaders would have allowed me to do some of the crazy things that we did, from hosting both human and dog weddings, to hosting made-to-order children’s birthday parties by Dior, Fendi or Givenchy. We had a pet spa with its own meditation room and gym. After having a wash and blow dry, [the pets] needed to recover,” she said.

Saks is a different animal but there’s a common thread, as McKee suggested. “Retail has always been about theater, excitement and fantasy,” she said.

As she discussed the future of Saks, the executive many regard as glamorous and daring and diving headfirst into new assignments, sounded pragmatic and not at all blind to the different challenges and different customers in the U.S., compared to Europe.

“Saks is an amazing brand, with an amazing opportunity, but it costs a lot of money to re-brand it,” McKee stressed. “When you have five million square feet of real estate space, you have to make a lot of investment in dollars to make it come into the 21st century. We will be investing a lot of money, very cautiously but well, to create something that I think will be spectacular.”

Saks is headed for culture change and a major merchandise edit beginning next year. “Fifteen to 20 new brands will be coming on board,” McKee told the audience of more than 130 students, faculty, friends and apparel executives.

Just when she arrived, before her speech on the premises of GCU, at 64 Wooster Street in SoHo, she told WWD that young designers, particularly from the U.K., where she sees enormous talent emerging, are high priority. The wave of brands that will be new to Saks next year will include British designers Victoria Beckham, Roland Mouret and Antonio Berardi, McKee told WWD. Asked if Saks can be as fast as Barneys New York or Bergdorf Goodman in launching new fashion talent, McKee asserted it’s not really about being first. “I think I am less competitive than everyone else,” she said, with an air of irony. “It’s more about having young designers — having freshness and newness — than being first.”

During the master class, she emphasized that it’s not all about the speed of change. “Talking about luxury, you can’t go overnight to something that doesn’t have every single brand in the planet, doesn’t have every single diamond brand, fashion brand, cool brand, technology brand, to saying…‘I’m luxury.’ There is a journey. It definitely is about evolution not revolution. We’ve seen a lot of brands that have attempted revolution and it’s scary and sometimes it doesn’t work. We have to know our customer. If I was just trying to replicate everything I have done in the past here in America, I don’t think it would work. The consumer base is different. The nationalities of the international traveler are different. The people we see coming into our stores everyday are different. We don’t have as many Middle Easterners here. We don’t have as many Kazakhstanis here. We don’t have as many Nigerian oil barons here. There is a very, very savvy American customer very driven by technology that understands what they want, that does a lot of their source searching online, that want to come into the brick and mortar for the experience. They are looking for a very different solution in retail from the one where I came from.”

McKee recalled the day Richard Baker, the chairman and ceo of Hudson’s Bay Co., which owns Saks, tapped her for the president’s job. “When Richard Baker first called me to join Saks Fifth Avenue, I was quite surprised actually. I remember thinking, are you sure you have the right number? We had this friendly banter. He kept saying to me, ‘It’s a big risk us taking a British girl to run Saks Fifth Avenue.’ I think he still says it today.”

In London, people doubted she would make the move across the pond. “Everybody said to me America is very different. It’s very big. There are 350 million Americans. There are 50 million illegals and only 50 million passports. These people do not travel. They go to Florida or Canada on holiday. Only 50 million ever leave the country.”

Nevertheless, the Saks job, McKee said, seemed interesting and she thought to herself, “I’ve got to do something before I am 50 that is different from what I am doing. So I landed in America with the great challenge and great honor of being president of Saks Fifth Avenue.

“We’ve got our hands full but it’s going to be an amazing experience. We have great plans, great ideas. It’s going to be a very exciting journey to transform the bastion of American retail into the most luxurious department store brand in America with some great concepts, great innovation, a commercial underpinning that makes us profitable — commercial but exciting — and I think we are going to have a whale of a time doing it.”

One special event for next year, she divulged, will be right in the middle of Central Park and will involve fashion, business, giving back to the community and the Central Park Conservancy.

McKee said she feels “very much at home at department stores. Some people can’t stand being there. When I go onto the beauty floor of Galeries Lafayette in Paris, La Rinascente in Milan, Lane Crawford in Hong Kong, I feel like I’ve come home.”

But there needs to be more hospitality in the stores. “Let’s try to welcome people. Meet and greet. First impressions really count. I like to walk through a store and say hello to people and have them say hello back. We have to become hosts and customers become guests.”

Here, a few of her other teachings:

• On success and her personality, McKee said, “The biggest impediment to success, as I tell my team and I tell my kids [two teenagers] is fear of failure. I have never really been someone who has been very scared about things. I don’t know why. I should be every day. I just kind of go into battle and do my best and it’s always kind of worked out.”

• On being called crazy, the executive admitted, “It’s something that happens quite regularly. I was told I was completely crazy when I had the idea to create an unbranded cosmetics department [at Harrods] that would allow us to be in charge of our destiny. Every time we had promotions, or new products, or must-have launches, or a new brand that we suddenly wanted to trial, we had the ability to do that, and were not encumbered by shops and shops that you had to knock down if you wanted a new brand.”

Estée Lauder came on board with 10 brands and everyone else followed. “When you have a success with something, it feeds an ego, gives you a desire, but doesn’t necessarily give you a life lesson.” Eventually, “I caved in,” as fashion and power brands became more important and Harrods had to “celebrate the heritage” of these brands by starting to shift back the approach.

• On personal communications: “I love receiving hand-written notes and I love writing hand-written notes. It’s a charming thing of the past that in the new age of digital, BlackBerry and iPhones, I see something long lost making a comeback.”

• On how she went from teacher to beauty executive: “When a recruiter for Estée Lauder approached me, I said ‘If you pay me double what I earned in teaching, I will gladly join the company,’ to which they said OK,” putting her on a new career path in beauty before entering retailing.

• On luxury: “It’s evolving at a very fast pace, becoming more discerning and sought after. In the new millennium, wearing a brand head to toe was a faux pas and a no-no in fashion.” In addition, “luxury brands attribute as much importance to their charity arms as their retail divisions. They know there is an onus on them to give back.”

• On service levels: Over the next 12 months, one of things I am focusing on, as well as the matrix, it’s definitely the service levels. It’s the most important thing in retail today. And the one thing that differentiates you buying online is the human touch and the intimate transaction between a seller and a buyer.”

• On a favorite slogan: Nike’s “Just Do It.” “It’s one of the best slogans in retail. I love it.”

• On designers: New designers is “a clear opportunity” and “young, established, international designers is really the winning formula.”

• On some key objectives: “We have to create special experiences…think global and get local…find out more about consumers….The shopping should be fun….I want Saks to have a voice. I want Saks to have an identity. I want Saks to have a point of view.”

• On visiting competitors: “I visited 23 cities in three weeks.” Sometimes visiting a department store, “I didn’t know if I was in a Nordstrom, a Neiman’s or a Saks. That’s not a criticism. It’s an observation.”

• On New York versus London ladies: “The ladies in New York are very well groomed. Manicures and pedicures are a bit of a luxury in London. In New York, it’s maintenance.”

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