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A changed Bloomingdale's emerges from bankruptcy Better management, service emphasized


NEW YORK -- As Macy's enters the quagmire of bankruptcy, its uptown rival, Bloomingdale's, is emerging from it next week with a new top merchant and a new attitude.

Michael Gould, who joined Bloomingdale's in May and took over as chairman and chief executive in November, is firmly shifting the focus of the company from the flamboyant path followed by his longtime predecessor, Marvin S. Traub.

Leading Bloomingdale's out of two stagnant years in bankruptcy and back to its former glory will be a tall order for Mr. Gould. The glitter and extravagance that made the store thrive in the 1980s now seem out of vogue.

Mr. Gould says that the costly extravaganzas that celebrated the art and culture of Italy and India, and the wares of less exotic locales such as Kansas, will be played down in favor of promotions focused more on selling products.

"You don't make any money on presenting culture and art," said one senior Bloomingdale's executive who insisted on not being identified.

Mr. Gould also acknowledges that customers today are less tolerant of the store's notoriously curt and inattentive service. He vows that service will improve and that shoppers seeking help will no longer be made to feel as if they are interrupting a conversation of great consequence between sales clerks.

Another change, he said, is that the 13 Bloomingdale's stores outside Manhattan will receive far more time and attention from top management, a shift in emphasis long overdue, retailing experts said.

It is understandable that the flagship store on 59th Street and Lexington Avenue has dominated the attention of top management, since it alone accounts for nearly one-third of Bloomingdale's annual sales of $1.16 billion.

But the stores in Illinois; Florida; Washington, D.C., New Jersey and elsewhere suffered as Bloomingdale's buyers concentrated on keeping Manhattan hipsters dressed in black.

Italian suits and other expensive merchandise snatched up by trendy New Yorkers often held less allure in other parts of the country.

"It's the tail wagging the dog," said Walter Levy, a retail consultant in New York, and a former Bloomingdale's executive. "They've been way too driven by 59th Street."

Mr. Gould, an energetic, 49-year-old executive with a penchant for wild socks, is out to change that. He demanded that the corporate staff stop referring to stores outside Manhattan as "remote markets" or branches. They are now simply called stores.

"I don't believe in branches," said Mr. Gould, who wore white socks with large blue polka dots in a recent interview. "They are twigs that come off the tree trunk."

Mr. Traub, who remains a vice chairman of Federated Department Stores Inc., Bloomingdale's parent company, approved of the company's taking a new direction with a new leader. "Good retailing always changes," he said. "It's absolutely appropriate that Bloomingdale's change in the '90s."

Mr. Traub gained retailing fame for his florid presentation of the latest perfumes and fashions during his 41 years at Bloomingdale's, 14 of them as chairman.

One of Mr. Gould's tasks is to restore Bloomingdale's faded luster. Bloomingdale's was dragged into the bankruptcy abyss in January 1990, when Federated, overwhelmed by the debts of its corporate parent, Campeau Corp., filed for bankruptcy court protection.

As Macy's is about to find out, the bankruptcy of a parent company can prove a major distraction for a department store company. At Bloomingdale's it disrupted the flow of purses, scarves and shoes from leery suppliers and limited the money available for remodeling stores.

The company has basically treaded water for two years. By concentrating on getting out of bankruptcy, store management had to put off creating the next-generation Bloomingdale's.

Federated, which also owns Abraham & Straus, Stern's, Jordan Marsh and other department stores, plans to emerge from bankruptcy next week. A federal bankruptcy court judge signed an order in January approving a reorganization plan crafted by Federated and its creditors.

Mr. Gould, who began his career at Abraham & Straus, came from the perfumer Giorgio Beverly Hills Inc. Earlier, he was chairman and chief executive of J. W. Robinson, a West Coast department store chain. Giorgio's sales grew rapidly during Mr. Gould's tenure.

"We have to learn to focus our attention on all stores," Mr. Gould said. "Until we learn to treat all stores with the same care and intensity, I don't think we will really capture the true potential of the organization."

To help get the message across, Mr. Gould has made it a rule that top management must visit stores around the country every Thursday.

Alan G. Millstein, publisher of the Fashion Network Report, a newsletter for the apparel industry, calls Bloomingdale's "a store with a split personality."

"It's a real dilemma," he said, noting the problem faced by Bloomingdale's buyers who want to present the store as a fashion leader, but also stock inventory that people in Boston, Chicago and Minneapolis will buy. He called the situation "a fundamental merchandising problem that will haunt them for years."

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