Despite rumors to the contrary, Bloomingdale’s CEO Mike Gould is hardly retiring.
The first time I heard Mike Gould at a podium 20-plus years ago, he had just been named chairman and CEO of Bloomingdale’s and was the sole honoree at a charity fundraiser. The introduction was extensive and full of superlatives, listing his accomplishments in academia (Columbia MBA), business (A&S, Robinson’s, Giorgio Beverly Hills) and non-profits (Lenox Hill Hospital, City of Hope, American Jewish Committee and many more). After 10 minutes of listening to effusive accolades, Gould strolled to the mic with no written speech and spoke for maybe 60 seconds, thanking his presenter for the recognition, but acknowledging what’s typically left unspoken: that he was chosen not for his accomplishments, but rather because his status as Bloomingdale’s chairman could raise money for the charity. (What vendor would dare refuse Bloomingdale’s?) Saying he was happy to be a conduit for a worthy cause, he thanked the audience and left the stage. I have admired Mike Gould ever since.
“To be CEO of Bloomingdale’s for 22 years (50 percent longer than anyone other than family) has been not just an honor but a totally unique experience,” he tells me during this “retirement” interview, at which he also tells me that he’s not retiring. “The two key jobs of a CEO are to create a strategic plan (which I have) and to execute a succession plan. About 10 years ago, I identified Tony Spring as the person best to succeed me and over that time, I moved him into different positions and worked with him to the point where last March, Terry Lundgren and I agreed he would be the next CEO. This gives me tremendous satisfaction: yes, I feel young, but I’ll be 71 when I leave, and it’s time to give others an opportunity.”
According to Gould, his tenure as Bloomingdale’s chairman has been less like a job and more like a passion that he’s been privileged to pursue for 22 years. “I really do believe what John Gardner (founder of Common Cause and Carnegie Foundation who wrote about personal renewal) says about life as an endless unfolding. I’ve preached it at Bloomingdale’s: our real job is not about buying and selling product, but rather learning something new every day, learning and growing and giving back. This is what I’ve tried to do here, and this is what I want to keep doing when I leave here.” Gould has also been greatly influenced by Rich Stengel’s highly acclaimed book Mandela’s Way. “Reading that book totally changed my leadership style,” he insists. “It’s the most powerful thing that’s happened to this company in 22 years and it’s molded our people in a special way.”
Asked to describe Bloomingdale’s niche in the retail universe, Gould prefaces by explaining that it evolves, which is why he’s fond of saying he’s had the same title for 22 years but not the same job. “We’re a full-line department store that’s upscale, accessible, and of the moment. We have more of a contemporary bent than our competition. We’re not luxury like Neiman’s or Saks but our luxury penetration compared to four years ago is mind-boggling: our new store in Glendale, California opened with Gucci, Vuitton, Chloe.”
Although he acknowledges that online is the fastest growing segment of the business, Gould worries little about e-commerce taking over and talks much about creating a compelling in-store experience. “If it’s only about price, we should just close our doors, but I don’t think it’s as much about price as it is about creating a social experience that Amazon can’t do online. I truly believe the opportunities of in-store shopping are greater than ever. An analogy: we went out to dinner last night with two other couples. (I only eat at two restaurants in Manhattan: a diner on Lexington Avenue and Cellini.) I could have called Cellini, told them exactly what we wanted and in a half hour, we could have had a great meal delivered to my dining room. But no: we shlepped out in the cold to 54th Street because we wanted the experience of the restaurant. The same with movie theaters: we could watch the same films on Netflix or on-demand, but where’s the smell of the popcorn, the social experience? Why are rooftop bars and restaurants so hot these days? I believe that if we create the right experience, in-store business will continue to grow. Of course, department stores can’t build 20 to 30 stores a year like they used to, but I don’t think the answer for Bloomingdale’s is 75 or 100 or 200 outlet stores like some of our competitors. We’re pleased with our 13-store outlet business and I’ve observed that in many companies—wholesale and retail—the outlet business has become so dominant that it’s hurt their regular business. I also maintain that by creating a fabulous in-store experience, we can judiciously add regular-price stores and increase productivity in existing ones.”
In his ever-candid manner, Gould points out how the image of online business is often inflated. “The truth is that the online business isn’t quite as great as it seems and the in-store business is somewhat better than it seems. That’s because if you buy six pairs of shoes online and return four to Roosevelt Field, it appears to be a plus for online and a minus for the store. That said, online will continue to be the fastest-growing part of our business. The customer who shops both channels is worth 3.5 to 4.5 times more than the regular customer. And where we add a store (e.g. Hawaii in two years), there’s always a halo effect of increased online business in that locale.”
It’s been said that among his accomplishments, Gould has managed to increase profits. Asked how this is possible with the amount of experimentation that Bloomingdale’s is famous for, he speaks about investing in newness. “I don’t believe that to be profitable, you stop investing. On the contrary, profit is directly related to finding better people and better product. I’m a passionate believer in our recruitment programs and our education programs. As for product, if we don’t look for newness on a regular basis, we become stale. The challenge in finding new resources is not so much discovering them but rather making sure our merchants understand that if we don’t take risks, we will fail. Failure is not in taking the markdown; it’s in avoiding the risk. I often argue that the best baseball player gets a hit only 35 percent of the time, and while a 65 percent markdown is tough, it’s okay to make some mistakes. Of course it was easier to take risks in boom times: when I was a retailer in California in the ’80s and every year saw eight to 15 percent growth, you didn’t have to be a genius to be a hero. It’s harder now that there’s more at stake and the growth has slowed, but even so, taking prudent risks is a fundamental and mandatory part of this business.”
Although he’s known to be a great merchant, Gould sees his legacy as something else. “If anyone says about me, ‘he gave me the opportunity to be more than I thought I could be,’ that’s all the legacy I need.” For his intrinsic humility and respect for others, Gould credits his parents. “My dad was a professor and I’d often observe how he gave his students the confidence to push themselves to excel. We could be in the middle of a family dinner and he’d always take calls from his students. My mother got her masters degree at MIT in 1936 when there were virtually no women there; she became a guidance counselor and worked for a foundation that helped young women in need. I didn’t inherit my parents’ intellect, unfortunately, but from them I learned a respect for others that has served me well over the years.
“One strong memory: we have a family home in Maine, a spectacular place on the water where we now go with our children and grandchildren. In the olden days, the plumbing was little more than a pipe from the lake into the house and in summers, my parents would invite the plumber and his wife to our home for iced tea and cookies. His name was Desi Greenleaf; he was just a plumber from this remote little town, yet my parents treated him no differently than the professors from MIT or the doctors from Boston who they also entertained. As a kid, I observed that Desi was always given the exact same respect as the Harvard professor who held the chair in history. So these were the values I grew up with, and the values that continue to guide my life.”