Ladies and gentlemen, please welcome Amir Kurangi and Mickey Drexler.
Hi everyone. I know it's late in the day and you guys are feeling a little sluggish, but we're going to make this very interesting for you guys and make it very informative. And like they said, my name is Amir Kurangi. I'm the founder and publisher of The Real Deal. For those of you who don't know, it's a real estate news outlet. And in my wildest dream I never thought that DJ Diplo and Fab Five Freddy would be opening up for me. But this is a pretty amazing experience to come on stage after those guys. And you know you might be wondering why they selected me to interview Mickey today. But we cover real estate and real estate has a lot to do with retail obviously and when it comes to fashion, the entry to fashion is very low, right? Everybody can go into fashion but to remain relevant in fashion is incredibly hard, right? So it's a very tough thing to do and to remain relevant year after year, decade after decade, people like Ralph Lauren, Calvin Klein, and to remain relevant like that. They're all from the Bronx,
Which I was going to say, you're messing up my intro, but so it's fitting that Mickey is also from the same neighborhood as those guys, but unlike those guys who've only had to manage their autonomous firms over the decades, Mickey is responsible for Ann Taylor, Gap, J. Crew, Madewell, he founded Old Navy. I mean he also founded Madewell and of course now he's doing Alex Mill and he's done these things from a very early age and that's where I want to start the conversation with.
Oh I like your interest like Jimmy Fallon comes out they okay go ahead. Well so you know a lot of people go, they want to get their careers started and it's very difficult to get to a place where you can, especially in the creative world, it's very difficult to get to a place where you can actually have an impact on that industry or on that brand or on that company. But you managed at a very young age, somebody thought it's a very good idea. You know, Ann Taylor was not a small company. There was a big company. They were doing tens of millions of dollars.
You got to put the microphone to your mouth. Small at the beginning. These are all long stories. I need about 3 hours but we have. So let me just get to the question. So somebody thought that let me get this guy who's in his early 30s to come and run this company. You say it's small, they in the early 80s to do tens of millions of dollars that was a number. But of course you came on and you created a real brand there. But what made you so attractive and appealing to those guys where they were like let's get this guy to come in and help us build this brand up?
Well, that's an interesting question. Those guys had no idea who they should hire. I got lucky. I hated my department store jobs for the 12 years. Bloomingdale's I started and I quit and I did actually well there.
Mickey, you got to hold it up to your mouth.
Oh, I'm sorry. I'm not good at this. So, and then I quit because why? I didn't find any bosses that I really felt had it. I was young and then I joined Macy's. I got recruited there. And after a year and a half, I quit. And then I went and made my biggest mistake, but I had to make a living in New York City, not anywhere. And then I went to work for a now defunct department store, Abraham and Strauss, in Brooklyn. I worked there four and a half years. When I say I hated it, in hindsight, I didn't find anyone who met my standards. Now, what were my standards? Very high. But
But you know, you were somewhat of a kid. You were a punk. You were like a 30-year-old guy. What standards? Like they were giving you a real major brand to work with here.
Well, we don't have time for therapy, but in hindsight, hindsight's better than foresight. I realized that I wanted to respect a boss. I was looking for something that I never met. Someone who was not only politically, I don't care about the politics, but most big corporations for me, they're bureaucracies. God forbid a CEO should, even in those three companies, God forbid they should talk to a salesperson. I talk to anyone on the ground who speaks to customers and it's respect and I think it's smart to speak to people who deal with customers. So I just didn't have a grand plan at all. But
But something made you appealing to those guys. I mean there's a lot of young people in this audience with a lot of aspirations right and they want to know how can they be selected in their young 30s to run a company. What made you appealing to them?
First I'm going to tell you about those two guys. They were both bureaucrats. They owned the company, owned like Brooks Brothers and some other properties. And the president, we used to joke they were in Washington DC, we'd go visit. And all he cared about was his cleaning. Go to the dry cleaners. He'd say, 'Pack, did you pick up my stuff at the dry cleaners?' And we really made jokes about that. The other guy, same thing. I don't know how they got to me. I said no twice. And a friend of mine who was a big shot, I had dinner with him one night. He said, 'What are you up to?' I said, 'Well, they offered me the head of Ann Taylor. I turned it down twice.' He said to me, 'Take the job.' He's very successful, older, well-known guy. He said, 'Take the job. I'd rather run a small business than be a vice president of a big crappy department store.' I called the next morning. It was a Sunday night. And I said to Manny, I was praying they didn't find someone else. He made that happen. If I didn't have dinner with him. You have all those things in your life that happen, good and bad. And you, so I got lucky. I don't know. I was a department store buyer. And I don't know why Manny and Dave recruited me. Someone probably knew me and whatever. Anyway,
You know, as a CEO and founder of a company, it's very hard. Like you said, you were looking for a mentor, right? Like you were looking for somebody that you could go to and get the advice. And as a young person of course that's it would be very helpful to have that. But you know once you are in that position, once you are in that CEO position, nobody pats you on the back when you do a good job, everybody wants to take a [ __ ] on you when you do a bad job. And then how did you continue to motivate yourself because at that age you had a board of directors to answer to and you've never had a position like that.
Don't get me started on boards. Okay. Go ahead.
But you've never had a position like that before. Like, how did you adapt? Like, you show up to work on the first day and what do you do?
I don't know why I ended up doing what I did. I had a not good childhood. They can't read about my childhood because I don't have much of a feel.
What? Oh, mic up. Okay. Anyway, I grew up in an environment where I wanted to get out. My dad was whatever, you know, my story. And I just wanted to do better and better in my life. And I didn't have the confidence. I was a shy kid. I was lucky. I went to Bronx High School of Science. I hated school. And there I was intimidated by all the kids who Philip Peller got an A+ on every test. I was like, 'Oh my god.' But I did learn how many years later school is being school smart. It's not being life smart. I grew up independently. I was like a good athlete. Stickball, handball. No one knows what those games are. Three sewer hitter. So I never thought about that. But in those days, 50s, 60s, you know it's not like the parents paid attention and my mom was very ill. But I had a drive because my father wanted to be a big shot and he wasn't. And he worked in the shipping room and I'll never forget there's a lot of stories but I took the payroll, I worked there for a summer in the shipping room, I took the payroll roll to the bank. What does a young kid do with a payroll? The envelopes tucked into a doorway and I went through everyone's salary and I saw my father who's one of the lowest paid people in the company privately. I didn't tell his soul. Privately I was very angry and upset because he always acted a certain way anyway. So what does that create? It creates a drive I guess. So and I wanted to be successful and he was so wanting to be a big shot. I don't know what effect that had on me but that was my childhood. So you grow up, I work very hard always. Why? Because the one thing he gave to me in his way, get out of bed, it's late. Could be 8:00 a.m. 7:00 a.m. in the morning. I'm a teenager. But I always went to work. And I didn't learn anything else. I went to work. It was a pattern. Sorting tables in my uncle's basement. Not tables, rags. I delivered the New York Times at Bronx Science. I always went to work always every summer. So, you know,
Yeah, I feel the same way. You know, when I was, I was always this tall. So, when I was 11 years old, I was able to work because people thought I was older than I was.
So, was your dad like my dad? I hope not.
I mean, he, we were, you know, he was, I was a refugee and we were separated at a young age. So, I didn't, he wasn't around much. But, anyways, and then after this is no time for therapy, but
Well, life is therapy, you know. Oh, go ahead.
But so after that, you know, there was a brand, a very famous brand that everybody here is familiar with, but something that people don't realize is that, you know, the Gap brand was around since 1969. Famously, they put it on their logo estimated since you established it as since 1969. But what a lot of people don't realize is that you left Ann Taylor and then you went to the Gap and that brand had been there for at that point, you know, 15 years and you went in there and you turned the Gap into a juggernaut.
Well, let me, I think people would be interested. Ann Taylor was bought by a horrible, we were a little niche business. Brooks Brothers was then going this way because they were taking quality out of the clothes. I used to see that. I also learned have your own brand because then no discounter will be able to mark your goods down. So I left because of this company Allied Stores. They were like they check desks in the corporate headquarters 10 to 5 then the guys would hang out, guys, women, whatever, they didn't know from that and the guys would hang out at the Yale club and it was, and then they tried to, I find any company that takes over a quality creative business destroys it quite quickly. So, I dealt with the guys at Allied and they're all men at Allied Stores and then they said, 'Put the name unit of Allied stores on all of your labels.' I, you know, you'd ruin the brand. I just didn't listen because the bureaucrats never really pay attention anyway. So, GAP approached me. I only wanted to open up my own company. But unlike today, give me 10 million, give me 20, I'll take 30. I didn't know who to go to to get money at all. I was a young guy. I had a list of things I put in a store. I started a business. Now, part of what you do is you kind of don't think about anything if you have a vision. I always had imagination. And I lived in my imagination as a kid trying to escape and you have an imagination. So I met with them for six months and I met the founder whatever and I spent a lot of time with them and I learned that if they are funding a startup in New York, I said they're going to go out of business anyway. So where does that leave me? And it's not like I studied any of this, but it's common sense. So I said to Don, I said, 'I can't do this and I don't want to move to San Francisco.'
Don Fisher, the founder. And he would, you know, he invented something in 1969. A lot of inventors I find don't move to the next step. When they stopped fair trading Levi's he started a company. Levi's only like a rocket for I don't know seven eight years or whatever and then they had discount, you're able to discount Levi's, company was plummeting. It went public and they got sued. In those days you could get sued. I don't know who ever gets sued for buying or selling stock anymore. It's a good practice if it goes like that and you sell the stock. Well, he can't get a speeding ticket anymore either. So, if it goes like that. But
Were you like a hot item? Were you being recruited by other brands?
No, I was never a hot item because I don't like hot items.
Well, so you at Ann Taylor, you made a success of that brand. And then the folks from the Gap came and they said, 'Hey, let's get this guy to come on.' Well, Don and I spent a lot of time together and I had a good reputation because as a young guy running Ann Taylor, very cool company. We made it into a very cool company with only the right people and you must have a vision and an imagination and you cannot depart from that. I had the list of my own company. I actually, I always wanted to do things that I could afford. I live in Bronx dollars even today. Ralph Lauren, who I always admired, it was a little too expensive for me. A lot too expensive. And so I said the world needs, this is all internal, they need a cool affordable.
And this was when you were contemplating going to the Gap.
No. No. Yeah, it was my own little startup which never happened. And I went to Gap. It was very simple color. What do you see first? I see red stripes here. Not attractive, but you got to get the right color palette. And I see color. I just had a vision. And I always loved the store on 57th and Madison was called, it was a French company, Olivier. It's a cashmere store. I always loved and I don't know where this came from. I love the 10 or 15 colors they always had in the window. So that was, so I used to daydream a lot about this stuff and I really knew I didn't say oh I don't like working for bosses. I still don't like, you know, the financial, you know, private equity, they, I can't, well this is being taped or videoed so I can't say too many specifics. So I went to GAP. It was a nightmare.
And then where was the Gap? Like where was it financially? Where were they when you came in?
It, the stock, it was a nightmare culturally for me. My Peggy and I had a really hard time. I don't know. This is San Francisco. Everyone whatever. I don't want to say anything bad about, I'm a Bronx guy and I'm a New York guy. And in New York, in the Bronx, you say five words and in all the other places they say 20 to get to the five words. So I went there from 57th and Fifth. The culture, and that's why when Marriott buys good hotels, they bring it to, culture is critically important, the environment, the leadership. And I'm not a big fan of most CEOs or I won't say them, the companies because it's built in. So I went to California. I commuted for about 6 months. I was the only schmuck who checked in and out of hotels as a president of a company. Every weekend I'd go to the hotel. I called Stan Bramley. I need a room. And Stan taught me one thing. I'll never forget. I wasn't sure what he meant because I invited the hotel, the guy who ran the Four Seasons. I said come to the office, talk to us and he always said the fish stinks from the head down. But I guess when I don't know if anyone knows that a fish if it gets bad it starts at the head. I use that now. Any company, it's a reflection of leadership and culture. And a lot of people don't agree with me. I'm so against offsite or what's it called? Working
Yeah. Well, no, working. But you work in your living room.
Work from home. Remote work.
And it's not allowed. And but you don't get the culture, you don't get the back and forth. When I work at home, if I'm like here, I'm here. So I work at home, too.
But I just want to say so you came into the Gap. You made it into
It was a nightmare culturally. You came in and you wanted to influence the culture from the top. But before we talk about that, just so they have a perspective. By the time you left the Gap, where was the Gap? You were one of the largest jean makers in the country at that point.
Well, they bought Levi's only. Okay, this is a five. You know, you got to give me another day to do this. But I went to the Gap. I have to tell you culturally, I mean, I'll tell you what my first visit the stores. So, I went to, I don't know why how I ended up Galleria. I parked the car. I'm visiting so I want to get a sense. So I park the car and I see on every windshield a flyer, today only gap 30% off everything. This is what I was up against. And they had 20 different names for jeans. They did surveys and research on everything. I'll never forget I said we're getting rid of all the names. I mean, you can't say that
This was decided without any research or any sort of
I don't, my research is me because I know. You know it's finally, I don't know if I, I don't want to like say anything naughty but you know I read in the Wall Street Journal a month ago that the consultant world is having a hard time in business. No, I don't know. That's what they said. And I said to myself, it's about time. Why? Because my board at GAP and it was a family control. Like for example, they wanted to go to Europe with stores and then so they hired McKinsey, you know, and McKinsey does this hugely expensive study. I knew we, you can't go to, you have to focus and culturally. So I called five or six people I knew in the industry who had stores there. Everyone said stay out of here. It's a pain in the ass. So I lost that battle. It wasn't even a battle. They didn't listen. And of course it was a disaster. Same thing happened to J. Crew. We opened stores. Growth, growth, growth. What good is growth if it's not quality long-term growth? Because and then people say they're turnaround artists. They're, if they don't live with a company and my new friend Jody has 10 companies to run. You know, there's no such thing as you get the stock price up and then you call the turnaround artist. You quit. You sell all your stock. You know, it's a lifelong thing to run a business. You never finish. Anyway, I know I have tangents and all that, but I want people, no one
I get that and you know it's, you know people talk about culture a lot now especially, you know, the whole tech boom in the early 2000s. I used to work for Yahoo and the big thing was that, you know, you got to have
Terry Semel, you work for Terry?
One of the early parts when Yahoo was the Google of the world. But you know people talk about culture and it's like oh we should have food everywhere and there should be a place where people can throw the frisbee and all that stuff. When you were creating culture at places like Gap, at places like J. Crew, there was this incredible loyalty to you by the people who worked for you. But how do you do that at a company like, our company is relatively small. It's a few hundred people. You had to come into these companies where they had thousands of employees. The infrastructure is already built. How do you influence culture in that sort of an environment?
You can't ever explain that. I never thought about influencing culture. The culture there was tasteless. It was discount and I was in a nightmare there for the first couple of years. Why? Because it was a nightmare and living, San Francisco was fine to live in but I mean my kids were growing up and the office was in San Bruno California in an office park and I'm thinking holy [ __ ] what am I doing here. My office overlooked the airport and everyone there said oh there's a noon flight to Hong Kong this, oh there, and there was Highway 280 and a cemetery. I'm sitting there, especially Friday afternoons. I said, you know, I'd be in the car on my way to Long Island today and here I am. It was very difficult, Peggy, for me. But the culture is a reflection of the leadership. You know, Steve Jobs never also thought about this stuff. You know, for 16 years he was my board. Not for 16 years I was on his. But you don't think about what you, It's who you are. That's your person. And for me, they say, well, Hoop called me, where's my friend Cat? She said, I yell a lot. And someone said it to me in the office two days ago. It's not really yelling. It's passion. I care a lot. But whatever. Cat, are you here?
And I feel like I ask questions and then like you
Where's Cat this morning?
Went on stage. Cat, join us.
No, don't. No, I'm kidding.
But you don't build a culture. It just happens, you know. You know, think of people, you know. I never was play acting as a CEO. You know, Mr. Important or Miss Important. And by the way, I'm not supposed to say this. Most, once said it. Some say you can get sued for this. Please don't. Most of the people of the management for me was all mostly women and it is to these days and there are reasons for that but I can't, I don't want a guy suing me.
