Cats in the Corner Office - Terry J. Lundgren

Thank you, Melinda.

Well, sure. First of all, when I was growing up, my parents didn't go to college, so it wasn't the regular conversation at the dinner table about what school are you going to go to, what are you going to major in? That wasn't the topic of conversation. I had four sisters and a brother. None of them went to college. None of them finished college. Two of my sisters attended but didn't finish. And I was fourth in line, so it really wasn't a natural thing that I would even go to college after high school. I played sports in high school and like every high school kid, I dreamed about playing sports professionally or something. My friends were going off to college and a couple of them were going to the University of Arizona. I grew up in Southern California. A couple of them were going to UA. And that's really what got me going. It wasn't for all the natural reasons that my kids experienced. I pounded into them, 'You're going to college. Which college are you going to go to?' That wasn't it with me. So it was very different. So I came to the UA, actually tried out for the basketball team. Lasted almost three practice sessions before I was blown away by the talent here. So I figured I better do something educational for my future. And then of course my first thing to do was to join a fraternity house. I was a Sigma Alpha Epsilon on campus here and that was a great experience and fun experience and a completely enjoyable experience. So fun that my father called me on my sophomore year and said, 'Hey, I got your report card. Looks like you're having a great time.' I was a really good student in high school and I became a very mediocre student in college because I was so distracted. I never lived away from home. I was having the time of my life and just enjoyed the fraternity life and all that. Long story short, my dad called, cut me off and said, 'You're on your own. We can't afford it. I'm working two jobs here raising your four sisters and your brother. I can't afford your fun time at the University of Arizona. Figure it out. And I hope you do, son. I really hope you graduate. I think it's a really great thing. But I can't be on my dime.' So I went to work. I went searching for a job and I went to every place that would talk to me. The one person that finally had a job that I was qualified for, which was nothing, was the Carillon Restaurant. I remember it burned down, which is a sad story, but it wasn't me. I went there and I remember interviewing with the general manager. It was a real wake-up call. First my dad's call was a wake-up call and then this interview with this general manager was a wake-up call because I remember interviewing for this job and sitting on a sofa talking to him and realizing he said, 'Okay, we'll call you.' I started walking out the door and realized he wasn't going to call me and that I wasn't even qualified to shuck oysters and peel shrimp. I thought, if I can't do this, what's the next job lower than this that I can do? What's below this? I said, 'Wait a minute. I can do this.' I turned around and went back to that general manager. I said, 'Give me a shot at this. I will show you that I can peel these shrimp and shuck these oysters and I can do this very well. I'll work for free the first night to show you that I can do it. Give me a shot.' He just looked at me and said, 'Well, why didn't you say so? That's what I was looking for.' What a great lesson. He was looking for the spark in me as opposed to this defeatist attitude that I walked in with, believing that my life was over. I even said on the phone call to my dad, 'You're ruining my life by cutting me off.' He said, 'No, son. If that's how you feel, you're ruining your life, not me.' That was powerful. So all that long story short, I started peeling shrimp and shucking oysters. I did well at that. In fact, one time the waitresses wouldn't show up. They hated that job. They liked serving cocktails, they made more money, so they didn't show up and I ended up serving. I broke the record for selling oysters and stuff because I was enthusiastic about it. Then I became a waiter. By the time I graduated, I had straight A's and they offered me the manager of the restaurant. These are great lessons for me. Not everybody's going to be the same, but for me, I realized when I didn't have a lot of spare time to screw around and make mistakes, I was very focused and got a lot done. That's the long way to say the University of Arizona was a very important part of my growing up phase of life.

Well, it found me. I came here also not knowing what I wanted to do. I know a lot of college students say this is what I want to be, this is what I want to do. My college roommate, my fraternity roommate, was that way. He knew he would be an engineer. His father was an engineer. He was going to go back to Iowa and be an engineer. And he did that. But not many of us had that plan. I was going to be a veterinarian. So I was pre-vet medicine when I started out. But about the same time that I got that phone call from my dad, I had the experience of doing artificial insemination of a cow. Glove on, searching for ovaries and stuff. This true story: my buddy behind me tapped me on the shoulder and said, 'Hey, Terry, see that guy over there?' All of a sudden this guy, poor guy, he had his arm amputated here. He's carrying a pail of oats in his right hand, his farm hand, walking on the University of Arizona farm. He said he lost his arm doing an artificial insemination of a cow. I didn't know what to think, but I pulled my arm out of there fast, left the glove inside. It was a terrible experience, I'm sure, for the cow as well as for me. But I started cracking up because obviously he was not true. But it struck me as so funny and so weird. What am I doing? This is what I'm in college for, to do artificial inseminations of cows. This is a great thing for a lot of people. This isn't what I want to do. That again was sort of an epiphany. I got in my car, went to the registrar, and changed my majors that day. They said, 'We'll work on something to change your major.' I said, 'No, you need to change it now. Today I need to get into business.' I didn't really know why. I just knew what I didn't want to do. So when I graduated, Melinda, I was doing a lot better in school. I had work experience and I kept getting promoted in the job, so things were looking okay for me. I got a lot of interviews.

I went through the career center. I'm going to tell you something. It's going to be terrible for the career center. They only allowed me six interviews. I followed people into the men's room. I waited patiently while they were waiting to wash their hands. I didn't follow them into the stall or anything, but I followed people out to their car. I was like a stalker, a college interviewer stalker, because I just wanted to get my resume in front of as many people as I possibly could. The end result was I was only allowed six interviews. I got 13 job offers. I got my word out there and met people. Not everybody loved my approach, but enough of them did to give me a shot at another interview. It really worked out for me.

Yes. Among those companies was Bullocks department store in Los Angeles. Again, I didn't know what I wanted to do. At this point, I was in debt. I had a car that my fraternity brothers could steal because you could start it with a nail or a screwdriver. It was so beat up and old, this Volkswagen. I really wanted a new car. All I wanted was a new car. I didn't care what it was, just something new that you could start with a key, basic things like that. I said, 'Who's going to pay the most?' I was determined to get job offers from all these companies. I did. Xerox offered me the most money. But even knowing that, I flew on Bullocks' dime to Los Angeles, near my hometown, and went there on a Friday for an interview on purpose so I could spend the weekend and then fly back to school on Sunday. Long story short, I fell in love with the company, the people. The college interviewer, Gene Ross, at Bullocks just had me. He was so impressive and such a wonderful guy, a father figure to me, and showed an interest in me. Frankly, that's what made the difference. So I signed up to go to work for Bullocks.

It was very important. Something to look for in an employer. The first thing, more important than that, is I always encourage people to try to take a summer internship between your junior and senior year. If you like the people that you're working with, not the company, not the job, the people, you're likely to like working there full-time and you're likely to get ahead there because you're kind of like them. You have some relationship with them and it's natural. If you really don't like the people but they're paying you a lot of money, I would tell you that's probably not going to last. You're either not going to fit in and they're not going to like you long term, or you're just going to get tired of it and want to leave. So the people I met in the interview process were very important to me. Secondly, I felt like they were paying attention to me, unlike some of the other job offers I received. The people I met at Bullocks, including Gene Ross, Alan Questro, Mike Steinberg, I felt they were taking enough time with me that they actually were going to pay attention to me and that if I performed well, I'd be on their radar screen. That did make a difference.

One of the best pieces of advice I received when I was 22 years old, when I was going to work for Bullocks, was after I'd been there for four or five months. I thought I was pretty hot stuff and wondered why I wasn't getting promoted already. I went to talk to the college recruiter and said, 'I feel like I could be doing more. They have me doing these meaningless tasks.' He talked to me about blooming where I'm planted. His message was: do the job, no matter how unimportant you think it is. It's important for the company, it has to get done. Do that job extremely well. You need to have an attitude that you're going to do this better than anybody's ever done that job before. And you're probably going to get promoted when you do it well, and you're going to be supervising that job. Then you'll know how to do it really well. It was great advice, good timing for me. I've lived my career that way. I stopped looking ahead and started looking at the job at hand. Before I knew it, I was getting promoted almost too fast because I would say, 'I'm not done with this yet. I haven't really honed this skill yet.' That had a positive impact. I would encourage young people to be incredibly diligent about learning the job you're in and try to do it better than anybody's ever done it before. People will notice and you're likely to get recognized for that.

Certainly in my case, Melinda, I didn't know that retail was going to be the perfect job. I had to find that out along the way. So don't panic if you don't know exactly what you want when you come out of school.

It wasn't part of my plan. When I was working in Los Angeles, I was living in Long Beach at the time, a place called Belmont Shore, which I still love. When I first started, my apartment was above a garage, a studio apartment, and I was commuting into downtown LA every morning. That was fine. But when I got advanced and had bigger jobs, I started flying around and my hours became more demanding. I needed to be closer, so I had to sell my home and get a home closer to LA. Then I moved to Dallas, Texas because the opportunity for Neiman Marcus came up. To be the CEO of Neiman Marcus when I was 37 years old was a very big deal. I packed up my family and moved. It's hard, but my family was very supportive and it worked out great. Then in 1994, I moved back to New York. I asked my family where they wanted to live, but I had to be within an hour of my office in New York City. We did it together. It's hard and there are sacrifices involved. But I never would have had the career that I've been able to have had I not accepted that there are some difficulties that go along with it. One of them is relocation. I look at it as an opportunity to advance. My kids have had a great life because they've lived in Southern California, Dallas, Texas, Greenwich, Connecticut. My apartment is now in New York City. They've had all these experiences. I think that's been good for them.

That's a good one. I think probably my store manager job. I was a store manager of Bullocks in South Coast Plaza. It's called Macy's in South Coast Plaza today. It was a big change for me because I went from being a buyer with two assistants in my buying office to having 400 people that I was now supervising in the store. I had to learn about getting things done through other people. I had to learn about making sure that the standards I had for the best people in all these key jobs was there and that I was doing it the right way and the fair way. These were totally different skills for me. Once I got that down and started seeing the results of what we could do together as a team, I think that was clearly my favorite job. Not my best job, but my favorite job. I've had a lot of other jobs since that have been really great and I love my job today. I love every job I've had. But that to me was a really fantastic job, being store manager.

Exactly.

I think I go back to this attitude that I developed about blooming where you're planted, just really doing the job that I was doing very well. I think that was very important. I also think that running the store at South Coast Plaza was really important because I realized I couldn't do it all myself. Up until that point, I basically was the buyer. I was picking the inventory. I was working with the marketing department to define what the advertising should look like. I was doing a lot of the stuff myself. When I realized that the bigger your responsibility becomes, the more you have to depend on other people to get it done, that was a key element. I think that's given me the success that I've been fortunate to have because I have surrounded myself all of my career with outstanding people. I'm so lucky to be able to go to work with this group every single day and learn from them. We're working together to solve problems and create solutions for consumers in a very sophisticated way. That to me is probably the best skill. We all do this stuff together as a team. I certainly lead that team, but I probably get more credit because they look for one person to give the credit to and to blame, by the way. But it really wouldn't be possible without the skills that I think I've developed in attracting, motivating, and retaining the best talent in the industry. That's what I would say.

The answer is yes. I have regular meetings with young people. I have the breakfast club I do just about every month. I let the human resources team bring together some high potential young people in our company who have been with us for just a few years and let them ask me questions for an hour over breakfast. We interact. You can just listen to people. They don't have to be the loudest person in the room. In fact, they're often not. But they're thoughtful. They're thinking about their questions. They're thinking about what other people are asking. You can just tell they're engaged and thinking about it. Of course, I can see what they've accomplished thus far in terms of their track record, how they get along with others in the group, sideways, up, people who work for them. All of that information together helps me assess. I may not be able to know exactly what somebody's true potential is in 10 minutes, but I have a sense generally speaking. Then that deeper probe about how they act 99% of the time that I don't see them and how they interact. I've had people who have really sucked up to me, played up to me very well, and I thought, 'Wow, that's impressive.' Then all of a sudden I hear that person didn't treat the people below them very well. No interest. You can't work here. You can't be part of my team if you don't treat the people who work for you, below you in different capacities, with the same respect that you give to me. That doesn't work for me.

I'm really proud of the students that have come from the University of Arizona. They get the job because they earned it. We have fantastic opportunities and interview tens of thousands of students coming out of college for these jobs. Obviously, we can't hire but a fraction of those. But I'm very proud to say that the University of Arizona is one of our top recruiting schools in the country. It's because of the quality of student that we're getting from both our Terry Lundgren Center here as well as from the Eller College. I'm really proud of the students at the University of Arizona and how well they're doing at Macy's and Bloomingdale's.

That's a great question. I have a great answer for you. There are two reasons why I focus on this. I focus on the millennial for recruiting our future talent that's going to run our business in the future, but they're also an important customer. We've made very good progress on both fronts. In the last few years, Macy's has hired approximately a thousand college students and graduates. About 250 are college students who are interning at Macy's or Bloomingdale's in the summer between their junior and senior year. Another 750 are hiring full-time positions into our executive development program. That makes us one of the largest college recruiters in the country. We are the largest college recruiter on many campuses. We don't recruit from 500 campuses; we recruit from a relatively small number because I believe that if you can be an important company engaged with a university like the University of Arizona, you and others are going to feed us great candidates. If you get the top 10% of the students from any university in America, you're going to get amazing students. By top, I mean a combination of grade point average and demonstration of hard work. I love it when a student is working and going to college, my own experience, or is an athlete juggling that, or is in some sort of a professional club. I just love busy 20-somethings. When you're busy, you're doing other things. So I look for that. It doesn't have to be a 4.2 grade point average with honors courses. It just has to be that combination. So we're a big recruiter. We're attracting and retaining this group. The average age of macys.com is 29 years old. Consider that there are people like me my age in that group. So the average age is 29 years old. We have a very big and powerful population of young executives in our company and that is the future of our company.

Sure, we do. Obviously, in those few years, they're going to be competing with others who are a few years out, so it's helpful if they have some experience in our industry or experience in technology, finance, store design. We have all these different career paths. But clearly, we hire those who have already graduated a few years ago. It would be helpful if you've had relevant experience in those three years to the area of responsibility you're looking to work in at Macy's or Bloomingdale's.

That's a good one. I look back at the last five years and it's been such an extraordinary run for our company. We've grown in the last five years by five billion dollars. Our company has been transformed. We've invested heavily in technology, in our stores, in our online business. We've acquired companies like Bluemercury and Story. We've launched new concepts like Market at Macy's. We're really excited about the future. The retail industry is changing rapidly and we're at the forefront of that change. We're focused on providing a seamless experience for our customers, whether they're shopping online, on their mobile device, or in our stores. We're also focused on our private brands, which are a huge differentiator for us. And we're committed to being a great place to work and to attracting and retaining the best talent. So I'm very optimistic about the next five years.

Sales, five billion dollars in revenues, and we've done it with from 23 billion to 28. So it's not like we're a hundred billion going to 105. It's a huge increase. And so when you think about it, I'm very, very proud, and we've done it by the way with fewer stores than we had five years ago. It's all because of the whole omni channel, the way the consumer is shopping now, and we're now the seventh largest internet company in America.

So, a lot of people don't understand that, but we are the seventh largest internet company in America after Netflix. They're six and we're probably trying to pass them in the next year. So, what I think the next five years offers for us is this opportunity for growth. First, the whole omni channel opportunity is just a moving target, which is very exciting. Customers are changing. We're constantly changing to stay in front of, and since we may not all be retail people, what tell me what you mean by omni channel. So today, the way the consumer shops is that he or she will pick up their phone and decide what am I looking for today? Okay, I'm looking for a golf shirt or I'm looking for a blouse that I'm going to wear to this party, and then they say, well, do I want a particular brand? Do I want to pay a certain price point? And just through some faceted navigation, wherever they are on Google search or whatever, you'll get some store recommendations and hopefully Macy's will be among them. It may be Bloomingdale's if it's a higher quality item, but for college folks, it would be more likely to be Macy's. And so once they take that information, they go to the store to actually touch the product, try on the blouse, try on the shoe, have the makeup artist apply the makeup the right way and say this is right for your skin as opposed to what you've been using. Those kinds of benefits of the in-store experience, Melinda, are growing. They're not deteriorating. And so start with the phone, go to the store, and then they may not buy it. They may not have all the money then or they may want to be thinking about it more. They want to do a little more research, and by the time they buy it, they might buy it on a laptop or a tablet device something like that. And so that's the omni channel experience, touching us in many ways with many devices. That customer who touches us multiple ways is eight times more productive in terms of what they buy from our company than the customer who only shops online or only shops in our store. So we love this customer who touches us in many ways. That's the omni channel experience. Lots of growth. We just started this last fall season same day delivery. We figured out how to do that through a third party service. You know, Uber's now...

We're not using drones yet. We still have human beings. Okay. But we are able to give very fast same day delivery, and we did it in eight markets as a test, and now we're expanding it to multiple markets this year. And we ship from our stores. We're doing all these various things that are all technology enabled that we couldn't do just a few years ago. So that's one. Two is we've launched the off-price business. So, you've heard of TJX or Nordstrom Rack or businesses like that. Well, we have 13 Bloomingdale's outlet stores and we're adding more, but we've never had Macy's, and we're launching this fall season. You'll see the first off-price businesses for a new growth opportunity there. Then you're going to see different sizes of stores that are much more digitally enhanced. So the stores will have much more technology and less inventory, but once you buy it, click on the merchandise or the walls or however we organize ourselves. We're still in developmental stage, be a smaller store, and we'll deliver it to you from another one of our bigger stores that has inventory. So we're thinking about new ways to present for growth. And also we just bought this fantastic company called Blue Mercury, which is considered really...

It's a fantastic company. It's the fastest growing luxury beauty business in America. We now have 62 stores. We just bought it in March, and they are growing very rapidly. And so we'll open these additional freestanding stores. It's all the very high-end brands, Bobbi Brown, Trish McEvoy, Kiehl's, I can go on and on. Magnificent product. And much of that product we don't have at Macy's. And so this is an opportunity to expand some of those shops inside of Macy's, but mostly just roll it out into freestanding stores both here and eventually someday internationally. So, we've got a lot of ideas for growth in the next five years, and hopefully you can tell, I'm very excited about it.

We are. We are. We're opening. We got an amazing store, and I'm glad you visited Bloomingdale's in Dubai. And so we've already announced that we're going to open in Abu Dhabi, which is only about an hour drive away from Dubai. Now I've been there many times. And we're going to have a Macy's and a Bloomingdale's in this new center in Abu Dhabi, which is fantastic. And then there's going to be more international. You'll hear more at the time when we're ready to announce something, but there's more happening on international.

You know, Amazon Prime is actually a very good program. So, you spend 99 bucks. People say, "I get free delivery." Well, you don't get free delivery. You spend 99 bucks. So, you pay $99 and then you get free delivery. But it's a good program that encourages people. We're now doing free delivery if you spend over $79 on your purchase. And so we do compete in that regard. But also this whole subject of speed of delivery is what's really moved forward. And once again, this is all enabled by new ideas. When you think of Airbnb and you think of Uber and you think of these other ideas, what they are doing is using capacity that's out there and not being utilized. So you think about your car, you got a car sitting in your garage or sitting in a parking lot, somebody could be using that car to deliver product. And I love that concept, and I give Uber a lot of the credit for really thinking about using capacity that exists that's just sitting there. And so the same thing now is possible for delivery. People are sitting, they have the car, they have time, either one, and why not put them together and figure out how to take advantage of that as opposed to hiring a service full-time that is delivering here and there. Now the capacity gets expanded in an extraordinary way. So, I think more and more of this is going to allow us to also compete with some of the good things that Amazon is doing in that regard. And I think what Amazon doesn't have is stores. My prediction is someday they will have stores, but that's up to them. Hope they don't. But what our great advantage is, most customers still prefer if they want to return something to return it to a store as opposed to bundling it back in a box and shipping it back. And by the way, if you do that too many times to Amazon or anybody else, it's frankly just very unprofitable for the company. It's great for the consumer, which is always great, but the company eventually does have to make money. So having it come back to our stores is what we always prefer, and the consumer has demonstrated that they prefer also because they may want to get something in their size that fits better or a different brand that fits them better or a look that's just right for them. So having them come back into the store is really our answer to any of these pure play retailers, a huge advantage for us. In fact, I just recently did a presentation called "Stores are the new black" because it's not just about pure plays. As I said, we're the seventh largest internet company today, but we also have the advantage of having stores very conveniently located for whatever service you require from them.

It is changing. When I grew up, you were basically in the stores organization and then you were in the central buying organization and you go back and forth at the different pyramid levels to get your experience. I think today, I know today, it's much more around this omni experience, and so we are having many of our executives start in either the dot world, either Macy's or Bloomingdale's.com, and then moving into the bricks and mortar business. And so in the Macy's building or the Bloomingdale's building, department store building, and then going back and forth in that way, I think, and then having some understanding of technology and the uses of technology has become more important. And also the merchandise planning, rotating people into the merchandise planning. So today, we're so large, our buyers for Macy's are buying for 775 locations, and so they can't do that on their own and really know what the customers want in Tucson versus Miami Beach versus Minneapolis. So we've got a planning team who does, and they have all these input points coming in using technology again, but also people in these markets feeding us with the information about what the differences are, time of year, deliveries, weights of fabric, color preferences, size preferences, and then the planning executives take what the buyer is buying and carve it out to be very locally oriented, very specific to that market. And so we're getting that exposure for these people as well. So that's just on the merchandise side. If you're in finance or in other parts of the business, we move you around to get the different experiences as well.

My Macy's, that comes from the fact that we drew this on the back of a napkin back in 2009 when we were going from eight buying offices into one in New York City. We said how do we make sure we replicate the localization needs of what I just described as customers in different markets? And by that, we had talent that we put into these different markets, and they using technology, and now we've built it up because it's been several years, so we have institutional knowledge about what sizes sell in Tucson versus in Orlando. So we've got that now sort of institutionalized. We've also got a sense about the color preferences in these various markets, but there are other things that we still need input on, and we're capturing that and using technology to feed it back. The planning organization has all these data points, and they are using all of this to make sure that we're specifically responding to the stores, so when the customer walks into an individual city, say in San Diego, the customer says, "This is my Macy's. You understand who I am in San Diego in the month of April because you get me, you get what I want, you got that inventory. This is my Macy's." And that's how that all came about. It's very exciting. You can really see as you travel across the country to different stores.

Ah, that's a good question because that's my most precious commodity is my time. You know, if I had an extra hour a day, I would meet with more of our employees that don't have a chance to meet with me as often as I'd like, and probably perhaps them. So that's what I would do. I have a really crazy schedule. I'm not complaining about it, but I'm just stating that sometimes I have to explain to people why I just can't see them, you know, and they send me these notes and they're very interesting to me. I just can't see everybody. And it's actually okay because, as I said at the beginning of this conversation, I have so many talented people that I trust that when I introduce this person to my team, they'll give the same response that I would have given to them, so they don't need to see me, but it's hard to explain to people because they would like to get in front of me. So I would do that. I'd rather spend more time with my own employees with that extra hour if I could, and really just taking their questions and responding to them.

That's a really good question. Not just what you learn from success, but what do you learn from failure? Yeah, that's a good one. So, Ashley. When I was 35 years old, I actually thought that I was in heaven because I was the CEO of Bullocks Wilshire in Los Angeles and living the dream. I had sold my house, two little kids, three-year-old and six months old, and sold my house. I was moving to downtown, near Los Angeles, west of Los Angeles, near my office because I was going to be working a lot. And all of a sudden, this guy interrupts my life and he buys Federated Department Stores. We were part of that at the time, and we were doing fine, but the corporation was purchased by a guy named Robert Campeau, Campeau Corporation out of Canada. So he bought our company believing there was value in the real estate. It's funny how this keeps coming around. And I was out of a job. And the way I was out of the job, I tell you, it was really hard for me because I literally was meeting the CEO because Campeau was bid against Macy's, ironically enough, and Macy's stepped aside as long as Campeau agreed to immediately sell Bullocks Wilshire and the whole West Coast operation, which is what Macy's wanted. And so they did that. And so my company was sold to Macy's immediately. And the next thing you know, here I am thinking that my future's grand, and now I don't have a house. I'm in escrow closing here, I'm in escrow buying over here, I got two little kids, I'm relocating, and my life is suddenly in the air. And I didn't know what was going to happen. Well, I soon found out what was going to happen, and it wasn't a good thing because I got a call. I was waiting to meet the CEO and the president of Macy's Incorporated flying in from New York to meet me after this was announced. And I got a call from our industry newspaper called Women's Wear Daily, and they said, "Hey Terry, how do you feel about the fact that you've been replaced?" Oh my god. I found out about this from the newspaper. It was like 6:30 in the morning. I just walked into my office, I was getting ready for a meeting at 8, and I didn't have my coat off, and I was answering the phone, and I was just stunned. And I was like, what? Actually, I didn't know this news. But I'm actually meeting the chairman and president in an hour or so. So for the heads up, thanks very much. And so I went and had that meeting, and actually I was waiting for them just to come in and tell me right away. I met with him for 30 minutes and never said anything. And apparently had a party for my replacement in New York the night before. So it wasn't like this was a well-kept secret except for me on the West Coast. Time change. I didn't really get that memo. And so I was like, what are you talking about? And so long story short, I said, "I got to ask this question. Is it true that I've been replaced?" They said, "Oh yeah, I'm sorry. We were going to talk to you about that, but we bring this person in, and that's what you know. So I'm sorry, thought you'd probably find something for you." And so I was really set back because I had all this stuff in my head thinking, what am I going to do? My family moving. It wasn't just a job. And so that was a huge setback for me and a really difficult experience. And I think I was able to turn it really quickly around and recognized that now this wasn't just about me. In fact, I had a whole organization here at Bullocks Wilshire who also could have the same fate as myself if I didn't start talking about just how talented, and in a very honest way showing some performance metrics, why they should survive and why they should get the job when they merge these companies. And so I took me about 30 minutes to have cold water on my face. But when I did, I came back and I started arguing that point. Let me tell you about how good and talented these people are, why you should consider them for the company going forward. And that ended up paying off. And every one of the people that I recommended ended up getting a job and staying with the company. And then they offered me a job, but it wasn't a meaningful job anymore. It was just a title. They called me president, but it was a job I had like two or three times earlier in my career, but it was just the same responsibility, but a different title. And I said, "That's okay. Thank you." And so I left. And I was out of work for like six months. And so it was kind of a terrifying time. And I was able to convince the people that I was buying my house from that I was going to pull out of the escrow to buy that house, which was the first thing, and I got out of it. And then I was able to convince the people who were buying my house that I was in this difficult situation. I got out of that situation. So at least I had some stability back in my home with my family while I figured out what I was going to do for a living. And obviously it worked out. Six months later, I became executive vice president of Neiman Marcus. And then shortly after that, less than a year, I became the chairman and CEO of Neiman Marcus. So it was terrifying, terrible, awful. And it couldn't have ended up in a better outcome for me.

And by the way, that outcome would not have happened if I was still the president and CEO of Bullocks Wilshire because I never would have left. So I get a better job, a bigger job, an even more prestigious company by being in an adverse situation. So there's this saying that sometimes when a door closes on you, a window opens, and you just have to know where to look to find it.

Well, number one, Zoe, and this will always be the answer. It starts in our business with the product. Okay? So you can have the coolest shopping environment or the greatest website or the nicest most wonderful experience, and I think those are all important, but if you don't have the right product, it doesn't matter. And I think you're seeing that in a lot of the specialty stores in the mall today who are struggling because they just don't have the right product that the millennial consumer wants. Fortunately, we do. We didn't always either, by the way. We put a real concerted effort on creating our own. We couldn't find the right product in the marketplace. So we really challenged our merchandising organization to respond. And there's this young millennial who's 14 to 21 and through college. And you've got the older 22 to 34 year old millennial who has totally different needs in terms of wardrobe. And we've responded to both groups, and I'm happy to say that both our kids business on the young side as well as our more contemporary business, M Style Lab we call it, as well as the Impulse business which captures the older millennial, is the strength of our business. And some of the great brands like American Rag and Maison Jules and others that we've created have really driven that. And the other piece was getting very focused on athletic. This young consumer wants athletic apparel and athletic shoes. We did this arrangement with Finish Line, and there's a real credible source in the athletic footwear business. Significant growing business there. The young consumer is all over it. And so that's what we've done. We've really responded to it, and it's been among the best performing parts of our business, the millennial young men and young women business, for our company for the last two years.

Yeah. Big transformation. Big transformation, but it's always about product. So start up there, and we got to do more by the way, Zoe. So we've made some good progress. The fashion business never ends. So you have to continuously reinvent and try to get in front of what's the next right fashion for young consumers. And I again feel like we've got such a talented team of people at Macy's and in our stores and our online businesses at both Macy's and Bloomingdale's. We're in a good position to continue that.

Yeah, it's a very good question, and I think it's a hard one too because we have 176,000 employees in our company, and I love to spend time with all of them as I said earlier, and I can't. But I think the way that we get at this subject is that we communicate and communicate and we overcommunicate. And so I do a lot of these presentations, speeches, conversations, webcasts, store visits, all of these things just to try to stay connected to our associates. And when I go to stores, it's really refreshing to have people recognize me. Sometimes I'd like to go incognito, but it's hard to do because even if I haven't been in a store in five years, when you have 775 Macy's, it's kind of hard to get to all of them. But even if I haven't been there a while or a long time or maybe never, associates there, people recognize me right away. And the only way they would recognize me is if they've seen me communicate with them. So that means they've heard our message. They've heard what our priorities are. They've heard about the My Macy's strategy, omni channel, magic selling. They've heard these things, and I think that's the key to keeping people engaged, is making them feel like there's this great big company, and we talk internally about how we want to make this great big company feel a lot smaller than it actually is. Like it's a mom and pop, family-run business. It just happens to be $28 billion and a national company. But we really try to think like that. We try to connect with people on that level. And then even my breakfast clubs, while I can't meet with everybody, I get 14 in a room if that's what the room fits, and I do it with some frequency. The word gets out that I'm a human being. I'm approachable, and I think that helps people. I'm an Arizona Wildcat, right?

Yeah, no kidding. Just had to throw in that commercial. So, we have about five more minutes it looks like, and I have to ask you what you're doing in Tucson. What are you here? We're so glad we can do this from your center, but tell us a bit about why you're here.

Well, I would just say don't give up. And also make sure that you think about what I said in terms of the people in the company that sort of defines how your experience is going to go in that company. So try to find a company where you really like the individuals, and if you do that, you're likely to do well there because you're going to enjoy that experience, and if you do well there, you're likely to have a successful career. So I would just say that, and then the don't give up part is, it's challenging out there. I know that because we're basically at full employment for the most part in America today, with only in the range of 5% unemployment. So we're basically at full employment today. Don't give up. There are people who will hire you if you are indeed knowledgeable about where you're going to work and why you want to work for that company. If you're able to convince every individual company, which is what I try to do, that theirs is the company you want to work for, and you have actual information backing up why this would be a great company, a great match for you, you're most likely to get their attention. So good luck to you everybody, and glad to be with you today.

Thanks, Melinda. Go Wildcats.