OFF the CUFF

  • Macy’s CEO: Martha Stewart Made ‘a Mistake’

    By CNBC | Off the Cuff – Mon, Apr 22, 2013 3:41 PM EDT

    In the latest chapter of the year-long legal battle involving Macy’s, J.C.Penney, and Martha Stewart Living Omnimedia, a New York State Supreme court judge ruled earlier this month that J.C. Penney can continue to sell Martha Stewart products under a “JCP Everyday” label – at least until an appeal by Macy’s is decided.

    Macy’s claims that under a 2006 agreement reached with Martha Stewart Omnimedia, the retail giant retains the exclusive right to sell Stewart’s goods. When J.C.Penney, the embattled department store chain, announced in December 2011 that it had formed a partnership with Martha Stewart Living Omnimedia, Macy’s sued both companies. Martha Stewart is the top-selling home brand at Macy’s.

    “Martha and I we were business partners and we were friends outside of the business, so it's really disappointing how the disagreement occurred,” Terry Lundgren, the chairman and CEO of Macy’s told “Off The Cuff.” “You make an agreement with somebody, you think you know them, you have an understanding, and then they go against that decision. You just say, ‘I wasn't expecting that.’ So yeah, that definitely bothered me.”

    He continued, “I think she wanted to either personally make more money, or the company wanted to grow the business somehow. The mistake was that we were the best performing business in their company. And for them to jeopardize that was a mistake on their part. They probably should have focused on other categories that did not conflict with the product-exclusive arrangement we had. So I think that's where they went wrong.”

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    J.C. Penney’s board ousted the department store chain’s CEO Ron Johnson in early April. The retailer suffered a $4 billion sales decline under Johnson. Johnson had testified in the case that Martha Stewart was a key component in his efforts to reinvent the troubled retailer.

    “I think that J.C. Penney probably made some mistakes by just not focusing on their customer, and who their customer was,” Lundgren said. “They wanted to try a new idea and a new thought. You can do that with a startup company. But when you already have an established customer base and you want to change that customer base, I think you need permission from the customer first. It doesn't appear that they got that permission.”

    Lundgren, one of the longest-tenured CEO’s in the department store industry, has helmed Macy’s since 2003. Last year Macy’s gave him an $11.3 million pay package – down 22 percent from 2011. “I took a 22 percent cut in pay this year because I set very high goals for our company, and the organization performed brilliantly. We had a 20 percent increase in earnings, we grew in same-store sales by over a billion dollars this past year,” Lundgren said, but added that “the goals that I set for myself were even higher than that. And so we didn't achieve all of the goals that were set, and so I deserve, therefore, to not be paid the amount that I was paid last year.”

    Lundgren went into retail in 1975, after he left college. “I had very shallow goals at that point in time. It was repaying my college loan and to pay for my car. The reason why I actually got into that business, stayed in that business was because of the time people took with me. They sort of grabbed a hold of me and mentored me over time. I remembered that, and I give that time back today.”

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  • “It can really mimic almost any other disease, which is why it's often been so difficult to diagnose,” said Arthur Agatston, MD, cardiologist and the creator of the “The South Beach Diet.” He was referring to something he calls “the stealth disease” – sensitivity to gluten, a condition which he claims many of us don’t even know we have.

    “We've just seen so many dramatic cases of patients who were undiagnosed for years and years,” he said. “Unfortunately, physicians are clueless when it comes to gluten. It's because a lot of the information is new.”

    Gluten is the major protein found in wheat, barley and rye. Nearly ubiquitous, it’s sometimes added to lipstick, toothpaste, soy sauce, even some medicines. But if you’re sensitive to it, gluten can cause stomach pains, headaches, skin rashes, fatigue or depression, according to Agatston. It can lead to or exacerbate chronic illnesses such as rheumatoid arthritis, and fibromyalgia, he writes, in his new book “The South Beach Diet Gluten Solution.” In it, he makes a distinction between “gluten sensitivity” and celiac disease, an autoimmune disorder which affects the small intestine, and which is hereditary.

    Agatston’s focus on gluten came about by accident, an outcome of how the "South Beach Diet" affected his patients. His original diet book was published in 2003, and there are more than 23 million copies of “The South Beach Diet” and its companion books in print. It was eventually published in 34 countries. “The first phase of our South Beach diet was intentionally grain-free to prevent swings in blood sugar. It was unintentionally gluten-free. I had no idea what gluten was when we wrote the book,” he said. “People lost weight. They improved their blood chemistries. We expected that. What we didn't expect was cures of psoriasis, of fibromyalgia, of several types of arthritis. And we kept seeing these really miraculous remissions of disease. I eventually realized that it was the gluten-free part, not just the grain-free, of the first phase of the diet.”

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  • Why this CEO Asked to be Paid Less

    By CNBC | Off the Cuff – Sun, Apr 14, 2013 7:12 PM EDT

    "They can't believe that I call myself the Big Chicken,” George Michel, CEO of Boston Market, told “Off The Cuff.” “When I introduce myself as the Big Chicken, the first thing is I get a big laugh and then they really want to see my business card.”

    Michel was named CEO of the fast-casual chain in 2010. His 40-year career in the food and restaurant business began when he worked as an hourly kitchen cook to put himself through college. “It taught me humility, to get along with people, and more importantly how to deal with the customers,” he said. “I understand what our employees go through, so connecting with them at the restaurant level, getting their ideas, making them feel comfortable is very important to me.”

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    His attitude to his employees extends to compensation – he claimed that he’s negotiated down his own raise on a number of occasions. “I felt I need to treat myself the way we treat our employees. I was given a raise

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  • "No matter what the circumstances, always offer hope. If you ever rob someone of hope, then you have sealed the outcome one way or the other," said Dr. Anthony Coles, the chairman and CEO of Onyx Pharmaceuticals. Onyx is a biopharmaceutical company that develops therapies for treating cancer—it has three drugs that are approved to treat five types of cancer. The company’s 2012 revenue reached $362.2 million, and its stock has more than doubled in the past year.

    “Running a cancer company is all about providing hope,” Dr. Coles told “Off The Cuff.” It was a lesson that he said was brought home to him when his own son was diagnosed with non-Hodgkin’s lymphoma, at the age of 12. “I actually noticed that his sternum, or the chest bone, was protruding and knew immediately that something was wrong. He was rushed to the hospital and we were hoping against hope that what I knew was true, wasn't going to be. But alas, it was,” he said.

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About Off the Cuff

Ever wondered what your boss eats for breakfast? Or why he or she works 24/7? Off the Cuff takes you outside the boardroom to show you what high-impact leaders do off the clock. Every week, corporate tycoons will answer questions about what they like (and loathe), what makes them get up in the morning, what inspires them, and what makes them the most proud.