NEWLY JOBLESS RETAIL EXECS SET TO FEAST ON TALENT-HUNGRY MARKET
Byline: David Moin
NEW YORK — They’re not exactly lined up at the unemployment office, but for the first time in years the retail industry is faced with a small army of out-of-work chief executives.
And they’re all hungry. Luckily for them, a number of chains, pressured by shareholders and directors demanding better results, are also in the market for big time talent and the most popular game in town during fashion week is guessing who’ll end up where.
Among the players generating the most chatter:
l Roger Farah, former Macy’s president, is said to be exploring numerous options, including a buyout of a major chain or accepting a high-level post. Rumors place him anywhere from Polo/Ralph Lauren to Saks Fifth Avenue and possibly even Neiman Marcus. He’s been spotted walking through Bloomingdale’s with none other than CBS chairman and Macy gadfly Laurence Tisch, a potential backer.
Meanwhile, Farah’s sitting on a $14 million payoff from Macy’s, waiting for the right deal, and has told friends he’s bored with golf. “Farah is taking all lunch invitations,” said a source.
l Myron Ullman, outgoing R.H. Macy chairman, is said to be mulling a post as second-in-command at Kmart, but might actually end up landing a top post at Duty Free Shops, a $377 million retailer.
l Art Reiner, former Macy’s East vice chairman, is reportedly a candidate to be the next chairman of Bradlees, or Finlay Jewelers. Woolworth’s may also be checking him out. Reiner is also said to be in the market for a retail property and is seeking backers.
The department store industry is notorious for having handsomely paid executives, but Farah, Ullman and Reiner would well exceed the going rate, commanding “significant seven-figure base with a seven-figure bonus potential tied to performance, by virtue of their jobs held in the past,” said Carl R. Carro, a partner in Executive Search Consultants International. “They should also get significant signing bonus, seven figures, usually a combination of cash and stock.”
“Ullman and Farah are being heavily recruited in both retail and non-retail principal-level jobs,” said another executive search consultant. “They’re like kids in a candy store.”
The Federated/Macy merger has put lots of talent on the market through the dismantling of Macy’s corporate office at Herald Square, combining Federated’s A&S division into Macy’s East, and a sense of job insecurity in the ranks, as more changes are inevitable.
For one, Macy’s I. Magnin division is expected to be liquidated or sold by its new owner. Joseph Cicio, former Magnin ceo was leading a turnaround, according to market sources, but saw the writing on the wall. He left last spring and could fill a top spot at a high-end chain or on Seventh Avenue. His successor, Scott Bowman is hanging in there for now.
Burnett Donoho, former vice chairman of Macy’s East, said Friday he’ll be out by December and will announce his new plans shortly. As reported, the post will be filled by Burdines president James E. Gray.
Joel Sneider, Macy’s East’s top ready-to-wear merchant, reportedly opted for a big severance instead a similar post at the combined Macy’s East/A&S division. He said he was ready for a change in career, but also hasn’t announced plans. Macy’s hasn’t announced its new rtw chief.
“In some cases, people take the money and run rather than stick around and deal with the pain of merging the business and merging different corporate cultures,” Carro said.
Others soon to be on Macy’s alumni list: Charles Chinni, a highly regarded home merchant, and Rhonda Brown, who ran Macy’s accessories business. Both will leave when the merger takes effect, which is expected next month.
“These are tough, no-nonsense, results-oriented executives, hands-on in running their businesses,” Carro said. He sees Chinni and Brown as commanding $500,000 salaries.
“There’s an unusual opportunity for retailers to pick up some particularly exciting talent today, primarily due to consolidation of Federated and Macy’s and the uncertainties and the downsizing of the industry,” said Robert Kerson, of Levy & Kerson Associates, retail executive search and consulting.
“Most of the people, with a few exceptions, are highly marketable, particularly if they’re merchants,” Kerson said. “The industry is facing a dearth of senior merchandising executives. Companies should view this free agency pool with aggressiveness.”
“The industry is fortunate because at a time when there are a significant number of high-profile jobs at Kmart, Woolworth’s, Bradlees and Brooks Bros., there’s also a number of capable executives who are in the market,” said A. David Brown, managing vice president at Korn/Ferry International, executive search firm.
Several of these executives, including Farah and Reiner, offer “a full range of desirable merchant and manager skills which the industry requires today, as well as experience in downsizings and bankruptcies,” Brown said.
During Federated’s pursuit of Macy’s, which began in January and ended in July when an agreement was announced, headhunters had a field day. “Recruiters called up and said it must be nuts working there,” said a source close to the scene. “The people working at Macy’s were thinking about their futures — not about selling merchandise. It doesn’t help anybody’s business, when the employees from the sales associates right on up through the organization, worry about their jobs.”
Reiner was among those squeezed out by the merger, but now he could fit the bill at Bradlees, which is looking for a strong merchant. Reiner’s got the reputation in hard and soft goods, while Barry Berman, current chairman of Bradlees, is considered a strong administrator but has limited soft goods experience. Berman is likely to return to his supermarket roots, considering his background at Stop’n Shop, a supermarket business that spun off the Bradlees discount chain in a public offering in 1992.
Federated/Macy’s isn’t the only source of manpower these days.
William Roberti, president and chief executive officer of Brooks Bros., surprised the industry Monday by resigning to pursue other interests but wouldn’t be more specific. Marks & Spencer, the company’s owner, is looking for a healthier bottom line — specifically, a 10 percent return on sales, as opposed to the 5.9 percent Brooks Bros. realized last year. The company has begun an executive search with Spencer Stuart & Associates.
And just last week, Jerry Mathews resigned as executive vice president of stores for Broadway Stores, setting another search in motion.
At the troubled Marshalls chain, hurt by sagging apparel sales, merchants reportedly are mailing out résumés and making the rounds of corporate offices. “There’s a history of steady turnover at Marshalls,” said a market source.
Elsewhere on the discount scene, Woolworth’s is looking for a chairman. William Lavin left in the wake of an accounting scandal last spring and, according to one executive search source, “Lavin is networking.” Peter Thorner, ex-president of Ames Department Stores, is looking for a job, and Philip Otto, president of Venture, will be replaced. At Kmart, some see Ullman’s becoming number two to chairman and ceo Joseph Antonini as a long shot, and speculation seems to have died down after news reports fueled the rumor last week. Antonini previously told WWD he’s not about to leave, though he acknowledged he’s actively recruiting high-level talent, and Ullman may prefer a number-one slot right away at Duty Free.
There’re also enough ex-Dayton Hudson Corp. officials on the street to spawn a national chain. Among the recent DH dropouts: Joseph Vesce, former chairman of the Mervyn’s division; Marvin Goldstein, former DH department store president; Henry DeNero; vice chairman of DH, who reportedly wants to run his own business, and Kenneth Macke, former DH chairman, who bailed out last July, saying he’d had enough of retailing. The departures, in most cases, are seen as part of management streamlining.
Others on the job market include Arnold Cohen, former chairman of London Fog, with retail experience at J. Crew, Bloomingdale’s and Gucci. His radical pricing policies at the outerwear firm upset retailers and led to his abrupt departure. He joined in September 1993 and left last month.
Locally, Galeries Lafayette on 57th Street closed its doors for good last month, putting president George Graf and the rest of the crew on the job hunt. He’s likely to take another operations post and was once a Bloomingdale’s regional store manager.
Ellin Saltzman, meanwhile, who was pushed out as Bergdorf Goodman’s fashion director last summer when rival fashion diva Dawn Mello returned as president, now says, “I have some irons in the fire — retail irons.”