FEMALE STORE EXECS AWAITING LAST GIANT LEAP TO CEO TITLES
Byline: David Moin / With contributions from Evan Clark / Kristin Young / Arnold J. Karr
NEW YORK — When her husband’s suicide propelled her to the chief executive’s position at the Washington Post 38 years ago, the late Katharine Graham took stock of the daunting challenges around her and commented, “I sort of thought figures were for men.”
History would demonstrate that Graham could handle the challenges of the boardroom as well as those of the newsroom, but her success was by no means a foregone conclusion back in 1963. And, while no woman in modern-day retailing has been permitted the belief that men have a monopoly on the numbers, the progress of women up the corporate ladder of retailing has been a bit too slow for some. But that could be changing. Even though sexual barriers aren’t exactly crumbling, retailing could become the breakaway industry for women.
Last month, Betty Dukes, a current Wal-Mart employee, and five former employees filed suit against Wal-Mart Stores Inc. in a San Francisco federal court charging that there are essentially two workforces at the national discounter, one mostly female and one mostly male. The one comprising primarily female employees represents 72 percent of the hourly sales force and only one-third of management positions. Employees in this track allegedly are assigned the lowest-paying positions with the least chance of advancement, according to the lawsuit, which seeks class-action status. The second group, the suit alleged, is largely male, representing less than 28 percent of the hourly sales force and two-thirds of store management positions. The male workforce, the lawsuit complained, also holds over 90 percent of the top store manager positions. The lawsuit also said that the potential class of plaintiffs could exceed 700,000 present and former female employees of Wal-Mart.
Wal-Mart has contested the claims of the suit but, as it prepares to do battle on the rocky terrain of gender, there’s widespread belief that retailing is where women might finally find equality.
According to a cross-section of female store executives, as well as headhunters and industry analysts of both sexes, a critical mass of female talent built up in the Nineties and that rising pool will spill into the boardroom. Men still dominate the chairman and ceo slots, and consolidation in retail may have slowed the progress of some women, but men no longer dominate the senior ranks of retail overall.
“Intuitively, it feels like we should have many more women in the top posts in retailing within the next five to eight years,” said Susan Kronick, group president of Federated Department Stores supervising the regional divisions. “Retailing is a great place for women. The business loves to reward results and there are not a lot of businesses where you can demonstrate personal and team results quickly — at an early age. For that reason, retailing is an incredibly fertile ground for talented people, let alone for talented women. I am very, very sanguine about what the industry can do for career growth.”
“There are a lot more women running major divisions than there have ever have been in recent past,” observed Jane Elfers, who has been chairman and chief executive of the Lord & Taylor division of May Co. since May 2000. “That’s a very positive step. In the near future, you are going to start seeing women becoming corporate ceo’s. A lot of companies are giving women great opportunities. I definitely see a change.”
“We’ve reached sort of a plateau here in terms of the full integration of the [retail] workplace on all levels,” said Marcy Syms, ceo of Syms Corp. “On the entry level, it is pretty well-integrated, in terms of color and sex. In middle management, it’s pretty well integrated in sexes, perhaps not racially. On the upper level, they are few and far between.”
“You’ve got a huge amount of women in number-two slots in all sectors of retail, from high-end to national chains to mass,” said Hal Reiter, ceo of Herbert Mines Associates executive search for retailers, wholesalers, consumer products and beauty industries. “Never does the board of directors doing the hiring tell us we want only male candidates. In the fashion and retail industries that is just a non-issue. In fact, frequently it’s just the reverse in a senior-level slot. There’s incredibly strong female bench strength.”
Stuart Kagel, chief operating officer of 24 Seven Inc., a staffing agency specializing in the fashion industry, observed, “There are so many talented women in our industry, the glass ceiling’s been shattered. A good many hiring managers that we’re dealing with are women, and to that degree the ‘old boy network’ has fundamentally collapsed in our industry when you evaluate the skill sets and skill levels required for top jobs.”
Just last month, the ranks of female ceo’s grew by one when Carol Williams was named ceo of Jacobson’s. She was executive vice president of merchandising at Saks Department Stores and before that president of 5-7-9 and executive vice president of Limited Stores. She’s added to a growing list: Dorrit Bern at Charming Shoppes, Kathy Bronstein at Wet Seal, Elizabeth McLaughlin at Hot Topic, Linda LoRe at Frederick’s of Hollywood, Helene Fortunoff of Fortunoff’s, Georgia Shonk-Simmons at Coldwater Creek and Marcy Syms.
Why haven’t more women become retail ceo’s? That’s a question many women and men prefer not to address publicly. Privately, they believe sexism and an “old boys club” mentality still prevail in many boardrooms, in retailing and other industries. Retailing, however, is an industry with one of the highest rates of job turnover, though that’s mitigated by its accelerating rate of consolidation, reducing the top jobs. Furthermore, aside from not getting promoted as readily, women get typecast into roles without profit-and-loss responsibilities, and fall into support areas, like human resources or marketing. Without this “line” experience, it’s tough for women to compete against men for the most senior jobs.
“It has only been in the last 30 years or so that women have moved up to the ranks of commerce and industry in general,” said Rose Marie Bravo, chief of Burberry, and a former ceo of the defunct I. Magnin division of R.H. Macy and former president of Saks Fifth Avenue. “At Saks and the Macy company, always at least 50 percent of our buyers and merchandise managers were women, and today, there are many women in high ranking positions at retail — heads of legal, finance, merchandising, marketing, advertising. There are many women in retailing. It’s a great career. I can vouch for that. In coming years, you are going to see more women at the top as they keep gaining credibility and validity.”
Asked if retail could lead the business world in placing more women at the top, Bravo replied, “Definitely. Retailing, cosmetics, fashion — these are businesses that feature women and can feature women very prominently. Retailing can lead the way for many other industries that may have been more masculine in nature, although you are seeing women rising to the top of all kinds of firms, be they financial, legal or other typical male bastion industries. In a way, retail is so focused on women because we know women are the primary shoppers in most stores.”
Kathy Bronstein at Wet Seal acknowledges that sexism in the workplace persists, but adds, “To say it’s specific to Wal-Mart or to our industry is ridiculous. I’ve been at Wet Seal for 17 years and there is definitely not a good ole’ boy network here. We have women in more typically male jobs and men in more typically female jobs. It really doesn’t matter to us. It’s not about sex, it’s about talent.”
LoRe of Frederick’s of Hollywood pointed out, “There are big numbers now of women in revenue-generating positions. Our industry is more progressive than the workplace at large. There are more female ceo’s now than there were five years ago.
“You’re talking to a female ceo,” she added. “I’ve not been held back. I’ve been helped by men in my career to get to where I am.”
Statistics culled from the U.S. Equal Employment Opportunity Commission support the idea that the apparel industry has embraced the concept of women in management more readily than others. In 1999, the latest year for which figures are available, reports from 40,000 private employers with more than 51 million employees revealed that only 33.2 percent of officials and managers across all industries were women.
However, among apparel and accessories stores, women held 61.6 percent of the management positions while they occupied 55.9 percent of the higher-echelon jobs in department stores.
Catalyst, a nonprofit research organization tracking women in business and working for their advancement, indicates that in 2000, there were 12,945 corporate officers in the Fortune 500. Just 12.5 percent, or 1,622, were women, compared to 8.5 percent in 1995. Seven retailers had 25 percent or more of their corporate office jobs held by women. Among the retailers with the highest degree of female representation: Nordstrom, with 15 of 36 corporate office slots held by women; Target had seven of 24; J.C. Penney had three of 11, and Venator, five of 20.
But when they are corporate officers, more often than not, the women don’t have line responsibilities, limiting their chances to rise to the top. In the Fortune 500, only four women are ceo’s: Andrea Jung of Avon, Cinda Hallman of Spherion temporary help, Marion Sandler of Golden West Financial Corp., and Carly Fiorina of Hewlett Packard.
Women have almost achieved parity with men early in the management pipelines, but progress in line officer jobs has been disappointingly slow, according to Catalyst.
“A lot of the times you can’t blame it on sexism,” said one female store executive. “There are plenty of women who take themselves out of the job pipeline at critical points in their careers, when they’re between 25 and 35, to have kids. Then they find it hard to get back in.”
Dawn Mello, former president of Bergdorf Goodman and now an industry consultant working with top brands, believes that certain social patterns spill over into the top echelons of corporate retailing.
“My advice to women is to take up golf,” she stated, only half-jokingly. “The retail industry does promote women, right up through middle management. It’s just at the very top where a problem lies. Women get to the gmm level, but what’s next? It is a fact that women rarely reach the presidential and chief executive levels. I was lucky. In the Sixties, when pregnant women were not permitted to remain on the job, rarely was there any expectation of them returning. Since this did not apply to me, I was able to progress in my career. But remember, I never became the ceo.”
Mello had higher expectations than many women in her generation. When she was growing up, she recalled, women weren’t seen performing at the level of men. They didn’t play sports as much, didn’t generally think about being part of a team and, as noted by Graham, weren’t expected to excel in certain areas, such as math. A competitive spirit and sense of excellence within a team environment weren’t nurtured.
“When I grew up in the business, women were not expected to achieve at the top level. Today, women play team sports, right up there with the boys in school, and grow up with expectations to succeed.”
Still, “the golf thing is really a fact,” Mello said, adding that men have learned to interact with each other in a way that women just don’t. Men “golf with each other, know each other from the golf course, mix with each other and promote each other.”
There’s no equivalent clubhouse for women.
Industry executives agreed that more fashion-oriented retailers, such as Saks Fifth Avenue and Gap, have a better track record at promoting women, compared to more hard-goods oriented firms, particularly mass merchants and discounters. “Diversity is a cornerstone of what we believe in at Kmart,” stated Chuck Conaway, chairman and ceo. “It’s a really critical issue for corporate America, not just with retailing.”
“If anything, it’s maybe better in retailing than other industries,” said Sheri Wilson-Gray, Saks Fifth Avenue’s executive vice president and chief marketing officer. “My perception is that retail has somewhat more women in the executive ranks than other industries.”
She said Saks has a good track record at promoting women. Four of the seven members of the executive committee are women, and about half of the 25-member operating committee are women.
Women, she believes, are more advantaged in retail than in investment banking or manufacturing. “Women are probably rising faster in retail organizations than other organizations and there are more women in retail in executive roles, relative to other industries.”
According to Catalyst, in a group of 61 industries, the general merchandising category ranked 17th with 15.4 percent of the corporate officers being women. Specialty retailers ranked 23rd on the list, with 14.5 percent of the sector’s corporate officers being women. Temporary help ranked first, with 26.1 percent; publishing ranked second, with 25.5 percent.
The general merchandisers included Ames, Dillard’s, Dollar General, Federated, Penney’s, Kmart, Kohl’s, May, Nordstrom, Sears, Saks, Target and Wal-Mart. The specialty retail group included Gap, Limited, ShopKo Stores, TJX and Venator.
Of the three apparel companies tracked, Jones, Nike and VF had 46 corporate officers, including 10 women.
By 2010, Catalyst projects, 20.1 percent of Fortune 500 corporate officers will be women, and by 2020, 27.4 percent.
“I have always believed that there is less of a glass ceiling in retailing,” said Kirk Palmer, of the executive search firm bearing his name. “While every industry has some distance to go in promoting women, the retail and apparel segments have generally been on the leading edge of recognizing and elevating women into important management positions.
“Should there be more women chairmen and ceo’s? Absolutely,” Palmer said. “That would be good for the industry.”
“Men still run virtually all the major retail corporations in America,” observed Tom Burns, who is president of Ballinger Sport, a fashion knitwear collection, and is a former buying office executive consulting to retailers. “But behind them, there are always great women, who have strong merchandising skills and strong business skills, and in many cases are paying more attention to the details — not just from a product point of view, but from a business point of view as well. It’s too bad that retailing and manufacturing have been dominated by men for so many years.”
Women On the Verge of a Service Breakthrough
In addition to those women who have already made the leap to the top posts of apparel retailing companies, a large and growing group of female executives stand on the cusp of leadership. Among those most often mentioned:
Grace Nichols, ceo of the Victoria’s Secret Stores division of Intimate Brands Inc., one of the few executives at Intimate Brands Inc. that have the inside track to Les Wexner, chairman and ceo of IBI and Limited Inc., and could be a candidate to one day succeed him.
Vanessa Castagna, executive vice president of J.C. Penney and president of Penney stores, catalog and Internet, has the experience required to head a chain. When she left Wal-Mart, as executive vice president, for the number-two slot at Penney’s, speculation arose that she felt she rose as far as she could at Wal-Mart.
Susan Kronick, who is widely seen as the next president of Federated Department Stores, in the event James Zimmerman, chairman and ceo, retires and Terry Lundgren, the current president, gets promoted.
Jeanne Jackson, former Banana Republic ceo, is currently ceo of Wal-Mart.com but that Internet business has been suffering, and reportedly, she’s been scouted by retailers.
OTHERS VIEWED AS HAVING STRONG POTENTIAL FOR ADVANCEMENT:
Linda Ahlers, president of the Marshall Field’s division of Target Corp.
Jane Elfers, chairman and ceo of the Lord & Taylor division of May Co. since May 2000.
Janet Grove, chairman and ceo of Federated Merchandising.
Karen Hoguet, chief financial officer of Federated.
Melissa Payner, president and ceo of the Spiegel division of The Spiegel Group
Beth Pritchard, president and chief executive of Bath & Body Works, division of IBI.
Dawn Robertson, president and chief merchandising officer of Federated Direct.
Kim Roy, president of the Ann Taylor division of Ann Taylor Stores Corp.
Sharon Jester Turney, ceo of Victoria’s Secret Catalogue and former head of Neiman Marcus Direct.