The University of Arizona Alumnus / Spring 2009
Q&A with Terry J. Lundgren
Chairman, President, and CEO of Macy’s, Incby John C. Brown
Photos courtesy of Macy’s, Inc
When Terry J. Lundgren ’75 ’00 left Long Beach, Calif., in the early 1970s to study veterinary science at The University of Arizona, he had no idea that 35 years later he would be a world-renowned expert in another type of animal behavior: the retail shopper.
As chairman, president, and CEO of Macy’s, Inc., Lundgren oversees an enterprise that includes nearly 170,000 employees who operate more than 840 Macy’s and Bloomingdale’s department stores in 45 states, the District of Columbia, Guam, and Puerto Rico.
Lundgren’s journey from shorts and flip-flops on the UA Mall to Manhattan’s fashion runways started at a one-time small and unassuming consumer sciences department in the UA College of Agriculture and Life Sciences. Today, the UA’s Terry J. Lundgren Center for Retailing, housed in the state-of-the-art, $25 million McClelland Park building, is considered the top retail school in the country.
He began his retailing career in 1975 as a trainee with Bullock’s, a Los Angeles-based division of Federated Department Stores, a company he has worked for much of his career, in between stints such as serving as CEO of Neiman Marcus. He guided Federated’s 2005 acquisition of Macy’s Department Stores that created one of the nation’s largest retailers.
Lundgren has two daughters and resides in New York City with his wife, Tina.
In April, he sat down with Alumnus and Advancing Arizona magazine during the Lundgren Center’s Global Retailing Conference at the Westin La Paloma resort in Tucson.
Tell us about the Global Retailing Conference hosted each spring by the UA Terry J. Lundgren Center for Retailing.
It’s amazing to me in the environment we’re in — a very challenging economy — that attendance for this event was at the highest level ever. We had everybody from the CEO of Saks Fifth Avenue to the chief operating officer of Wal-Mart. We had John Varvatos. If you haven’t heard of John Varvatos, you will. He is a fantastic designer.
Explain how industry partnerships with the Lundgren Center benefit both students and retailers.
Macy’s, Inc., marketing has video conversations back and forth from New York to Tucson with consumer research students at the Lundgren Center for Retailing. The students are talking to us about how we look at consumer data and how we use that data to market to consumers. They are applying what they learn to their schoolwork, while giving us feedback about how they shop and what motivates them. You are going to see more and more companies participating in this type of collaborative work.
Besides VIP seating at the Thanksgiving Day Parade, what’s been the most rewarding aspect of serving as CEO of Macy’s, Inc?
We have the most talented team in the industry. I hear that from our vendors and all of our partners — the best practices, talent, and ideas come out of our team. The talent and the fact that we have gone from owning 200 Macy’s and 30 Bloomingdale’s stores just two years ago, to more than 800 Macy’s and 40 Bloomingdale’s stores today. I am proud to have done that in a seamless way, and I am particularly proud of our people. With all the challenges and turbulence in the marketplace, we continue to outperform just about every one of our competitors.
One competitive advantage you enjoy is having exclusive relationships with high-power brands such as Martha Stewart and Tommy Hilfiger. Explain how this happened.
We have a fantastic relationship with Martha Stewart. She and I talked for a couple of years before we made the deal. All the Martha Stewart products we sell in our stores — from textiles, to cookware, to housewares — are all exclusively sold at Macy’s. She and her team are so happy with the relationship they want to expand into new categories. We are not ready to announce it, but it is going to be very exciting to see where we take this relationship.
I have known Tommy Hilfiger forever, but for him to make the decision to come exclusively into our stores is a big deal. We have been under way for about six or eight months now, and it is the single most successful apparel brand we have in the store.
Speaking of celebrities, you’ve been a guest on the NBC reality show The Apprentice with Donald Trump. Do you have any inside knowledge about who is going to win this season’s Celebrity Apprentice?
[laughs] Well, definitely not Dennis Rodman. That was the last show I saw. When you first see the cast of characters for Celebrity Apprentice you never know how it is going to work out. But it’s kind of fun, I have to say. I find it incredibly entertaining. I don’t watch a lot of television, but I do watch Celebrity Apprentice, and I often get an update from Donald the next morning.
Macy’s, Inc., is an industry leader in the advancement of female executives. Describe the changes you’ve seen in the industry during your career.
Women executives in some industries have bumped into a glass ceiling, which is really crazy. Why would you even consider not attracting the best talent regardless of gender, race, or country of origin? You want the single best talent you can get. We have been an advocate of diversity, as well as promoting female executives. Today, about half of the highest-compensated and most-senior people in our company, my direct reports, are women. Two-thirds of the vice presidents, and up, are women. As a result, we get some of the most fantastic women wanting to work for our company. It’s a competitive advantage and we are very proud of our track record.
You played an important role in supporting the new McClelland Park Building. Describe your personal satisfaction with the school’s success.
The Lundgren Center for Retailing is now the number-one center of its kind in the United States. I have only been involved for a handful of years, but to watch a dream and idea become a building is heartwarming to me. We have a 20 percent increase in enrollment this year and we are going to graduate 500 students. That’s bigger than any school in America, and it’s just going to grow from here. I am very proud of what we have done, but I now have an appetite to do more.
You started your career in 1975 as a trainee. How has working your way up the ranks helped you as CEO?
I started as an executive trainee, like most young students who come out now. We have a fantastic training program at Macy’s, Inc. and we had a very good program when I started at Federated Department Stores. I began as an assistant buyer, and then was a college recruiter for a year-and-a-half. Later I became a buyer and store manager, then a regional director of stores. I did various jobs supervising different levels and numbers of people, and had different roles and responsibilities. All those jobs helped me become a better leader because I actually did the jobs I am supervising today. Every job I had prepared me for the job I’m doing today.
Describe some of your experiences at the UA. What’s changed? What has stayed the same?
When I came to The University of Arizona — it feels like a hundred years ago now — the campus was much smaller. It was easy to walk from class to class and from room to room. I lived in a fraternity house and campus was a bicycle ride away. It was very compact and pretty simple then. I see it now and the progress is quite extraordinary. I see everything from the student union, which our company supported the development of, and then of course the Lundgren Center for Retailing, which was not even a dream back in those days.
What seems to have stayed the same are the enthusiastic students. I just had a conversation with about 150 of them in our Lundgren Center auditorium. You know, the questions were my favorite part. They were just fantastic.
What are some of the ways you have stayed a Wildcat for Life?
Every year, I host an alumni event and a new students and parents event in New York City. I’m getting bigger and bigger groups from the East Coast going to Tucson for school. It is just fantastic to have kids from different parts of the country come together.
What advice do you have for students entering the job market?
I advise students to take getting a job very seriously. Study for it, prepare for it, and follow up. Treat it like your most important job is getting a job. That’s the attitude I think is most important to have. Students who make progress are busy, active people. If you volunteer, have a part-time job, or are busy doing athletics, as well as going to school, to me, those are the future leaders.
You can’t just go to class and party the whole time — I used to do that, by the way, my first two years. The best thing that ever happened to me was that my father figured it out and cut me off. I ended up having to work and go to school. When I had no time, I did much, much better in school. That was a life lesson for me and it’s certainly something we look for in the students we hire; that whatever they are doing, they are active.
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