M Macys Inc

By Suzanne Kapner 

As an English major at Stanford University, Jeff Gennette developed a love of words that has translated into a hard-core Scrabble habit. Now, as the incoming chief of Macy's Inc., Mr. Gennette must solve a puzzle that has bedeviled some of retailing's brightest minds: how to fix the ailing department-store model.

Mr. Gennette will take over as the chief executive of Macy's early next year. Even though the 55-year-old has worked at the retailer for three decades and has been CEO Terry Lundgren's heir apparent since 2014, he is stepping into the role at a time of tremendous upheaval for the industry.

Once the bellwethers of retailing, department stores are under threat from online rivals like Amazon and fast-fashion retailers like Primark and Zara, at a time when consumers are forgoing the purchase of sweaters and handbags to spend more money dining out or traveling.

"Jeff has a difficult job, as does anyone today in traditional retailing, " said Bob Mettler, who as the former chief of Macy's West Coast division was Mr. Gennette's boss for many years. Both early risers, the two would meet at the office well before 7 a.m. to discuss personnel changes, marketing budgets and other issues.

People who have worked with Mr. Gennette say he has the benefit of both merchandising and store-operational experience. Typically, retail executives rise through the ranks on one side or the other.

As a merchant, Mr. Gennette honed a reputation as a trend spotter. Ronny Wurtzburger, the president of men's suit maker Peerless Clothing International, recalls getting a phone call from Mr. Gennette two years ago. "He said, 'What are you doing about this new blue that's coming out?'" Mr. Wurtzburger recalled. Peerless quickly began producing suits in the color, which is a few shades lighter than navy.

"The dark blue had been a staple for so long," Mr. Lundgren said in an interview on Thursday. "Jeff saw that this shade of blue could translate into a new look" that would give men a reason to buy a new suit, Mr. Lundgren said, adding that suits in the new blue have been "big sellers" this season.

Mr. Gennette already has a prediction for next year's hot color: Gray, or rather "shades of gray, from dove to charcoal," he said in an interview.

Mr. Gennette is keeping his strategy for fixing Macy's closer to the vest. He said his plans will likely include a move to simplify prices as well as better curation of merchandise to set the retailer apart from the often overwhelming choices available at online retailers. He also wants to infuse Macy's stores with more entertainment.

"We have a heritage of being an entertainment brand," he said. "And that's what customers want right now."

Growing up in El Cajon, Calif., as the youngest of four siblings, Mr. Gennette was an unlikely candidate to one day run the nation's largest department-store chain. His mother was a nursing instructor and his father a history teacher. He was more interested in books than fashion.

"I didn't know what topsiders were until I went to Stanford," Mr. Gennette said referring to the popular Sperry boat shoes.

He caught the retailing bug at age 16 while working at a local store that sold mopeds to earn money for college. While at Stanford, he worked at the Faculty Club, starting out as a dishwasher and eventually rising to manager.

He got a job with Macy's as an executive trainee in 1983. After leaving briefly to work as an FAO Schwarz store manager, he returned and climbed through the ranks holding merchant and operations positions at various divisions before running the company's Northwest unit.

After the 2005 merger of Federated Department Stores and May Department Stores, Mr. Gennette was instrumental in combining various merchandise units into one team. Federated owned Macy's and in 2007 converted all the nameplates, including Burdines, Filene's and Marshall Field's, to that moniker.

Mr. Gennette lives in New York City with his husband and the couple have a daughter. He became chief merchandising officer in 2009 and was promoted to president in 2014. He received compensation totaling $3.7 million last year, according to a securities filing.

He championed the idea of devoting floor space and marketing dollars to five "power brands" -- Ralph Lauren, Calvin Klein, Tommy Hilfiger, Michael Kors and the private label INC. And he came to an early realization that Macy's had to change its game plan if it was to attract millennial shoppers.

Mr. Gennette stepped up an effort to lease space in Macy's stores to Finish Line and LIDS Sports Group to sell sneakers and sports apparel. He helped steer the transformation of the basement of Macy's flagship Herald Square store into a millennial playground with selfie walls and 3-D printers. And he expanded Macy's bridal registry to attract young shoppers who are tying the knot.

Not all of these efforts have worked. Mr. Gennette said Macy's was able to increase market share with older millennial customers, but was only able to arrest the decline with the younger part of that cohort.

A Scrabble fanatic, Mr. Gennette says he plays two computerized games a day at the "expert level." He is also a voracious reader. He is currently tackling the Thomas Hardy novel "Jude the Obscure" about a man who dreams of being a scholar but is waylaid by life and love.

But don't draw any parallels to Mr. Gennette's life. He said his parents never wanted him to be a teacher. "Teachers aren't paid well," he said.

Write to Suzanne Kapner at Suzanne.Kapner@wsj.com

(END) Dow Jones Newswires

June 24, 2016 10:48 ET (14:48 GMT)

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