Off the Cuff

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

Off the Cuff

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.”

RELATED: From Homeless to Hair Care Billionaire

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.”

Lundgren helps support the study of retailing and consumer science through The Terry J. Lundgren Center for Retailing at his alma mater, The University of Arizona. He said he holds monthly mentoring breakfasts for Macy’s younger employees, but it’s a two way street: “In many cases, they're educating me.”

As the CEO of a department store chain, he said it’s important that he have a sense of fashion. “It is a little bit of a joke at my home, but my closet is significantly larger than my wife's, and we do get in little arguments about that,” he laughed.

RELATED: Diamonds Are a Man's Best Friend

They didn’t argue, however, over the dress his wife wore to their wedding. “I designed my wife's wedding dress but, keep in mind that there was somebody standing right next to me. Her name was Vera Wang. She wasn't going to let me get too far off track,” he said. “We did blindfold my wife throughout the five fittings. So she never saw the dress until the day of the wedding. I did take a little bit of a gulp when she finally said, ‘It's beautiful.’”

The impeccably dressed Lundgren made an impression even as a college kid – when he tagged along with a friend to a 1972 casting call for an iconic game show. “My college roommate was from New York and he was desperate to go on ‘The Dating Game,’” he recalled. The producers persuaded him to audition too, he said. “I went in, I interviewed, I got selected, he didn't. It was really embarrassing. Long story short, I went on the program, I was bachelor number two, and I won. I won a date.”

Rates

View Comments (562)

Recommended for You

  • Obama admin. says health subsidies will continue

    WASHINGTON (AP) — A federal appeals court delivered a potentially serious setback to President Barack Obama's health care law Tuesday, imperiling billions of dollars in subsidies for many low- and middle-income people who bought policies.

    Associated Press
  • What a Marijuana ETF Would Look Like

    The changes taking place around marijuana for medical use and for recreational use are the biggest in almost everyone’s lifetime. There are quite literally billions of dollars up for grabs for those who ...

    24/7 Wall St.
  • Record up to 6 shows at once with FiOS Quantum TV

    Get superior entertainment with FiOS TV, Internet & Phone at a great price & a Free Upgrade to FiOS Quantum TV-Enhanced Service with 2/yr. agreement.

    AdChoicesVerizon FiOSSponsored
  • CEO: Rivers to quit Clippers if Sterling stays

    LOS ANGELES (AP) — The interim CEO of the Los Angeles Clippers testified Tuesday that coach Doc Rivers told him he will quit if Donald Sterling remains the owner of the team.

    Associated Press
  • U.S. housing turning the corner, inflation creeping up

    By Lucia Mutikani WASHINGTON (Reuters) - U.S. home resales hit an eight month-high in June, suggesting the housing market was gradually regaining momentum and would help the economy to stay on a higher growth path this year. The third straight month of home sales gains, reported by the National…

    Reuters
  • We Paid Off $90K of Debt in 4 Years

    One couple went into debt to give their son the education that he needed, eventually owing nearly $90K on credit cards. Here's how they paid it off.

    Credit.com
  • China food scandal spreads, drags in Starbucks, Burger King and McNuggets in Japan

    By Adam Jourdan SHANGHAI (Reuters) - The latest food scandal in China is spreading fast, dragging in U.S. coffee chain Starbucks, Burger King Worldwide Inc and others, as well as McDonald's products as far away as Japan. McDonald's Corp and KFC's parent Yum Brands Inc apologized to Chinese…

    Reuters
  • Airlines ban flights to Israel after rocket strike

    JERUSALEM (AP) — A Hamas rocket exploded Tuesday near Israel's main airport, prompting a ban on flights from the U.S. and many from Europe and Canada as aviation authorities responded to the shock of seeing a civilian jetliner shot down over Ukraine.

    Associated Press
  • Detroit retirees back pension cuts by a landslide

    DETROIT (AP) — A year after filing for bankruptcy, Detroit is building momentum to get out, especially after workers and retirees voted in favor of major pension changes just a few weeks before a judge holds a crucial trial that could end the largest public filing in U.S. history.

    Associated Press
  • American Express Cards

    Earn Cash Back, Travel, or Points. Find the Card That's Right For You!

    AdChoicesAmerican ExpressSponsored
  • Play

    How to Build Your Own Annuity

    Instead of paying an insurance company, financial advisor Allan Roth recommends building your own "indexed annuity" that protects principal while giving market upside.

    WSJ Live
  • Goldman Sachs: Here Are 25 Small-Cap Stocks to Buy

    While Goldman Sachs is cautious on small-cap stocks due to valuation concerns, the firm still finds some pockets of opportunity among individual names within the group.

    The Wall Street Journal
  • Herbalife Plummets

    Herbalife shares were down as much as 11%...

    Business Insider
  • New India government urges changes to World Bank

    India's new government has called for reforms to the World Bank structure to reflect the "emerging" clout of developing nations in a meeting with visiting bank chief Jim Yong Kim. The government, which took office in May, said in a statement late Tuesday that Finance Minister Arun Jaitley stressed…

    AFP
  • Play

    U.S. Stocks Open Lower

    U.S. stocks kicked off the week in a decline, as investors paused following last week's run to record highs. MarketWatch's Victor Reklaitis joins Paul Vigna on the News Hub with the details, plus which stocks to keep an eye on. Photo: Getty

    WSJ Live
  • Microsoft profit hurt by Nokia, but revenues jump

    Microsoft said Tuesday profits took a hit from its newly acquired Nokia phone division but that revenues got a strong lift from cloud services. The US tech giant's new chief executive Satya Nadella said the results suggested that Microsoft's shift to services amid declining personal computer sales…

    AFP
  • A 2014 IIHS Top Safety Pick

    Your safety is our priority. Advanced safety features are available on the new 2015 Mazda6. Learn more today!

    AdChoicesMazda USASponsored
  • Beef pollutes more than pork, poultry, study says

    WASHINGTON (AP) — Raising beef for the American dinner table does far more damage to the environment than producing pork, poultry, eggs or dairy, a new study says.

    Associated Press
  • JetBlue pilot among 6 arrested in Boston drug bust

    BOSTON (AP) — A JetBlue pilot from Florida is among six people arrested by Boston police over the weekend in an investigation of drug dealing incidents near the Boston Common.

    Associated Press
  • How to avoid the biggest 401(k) mistakes

    Avoiding these four common, but serious, 401(k) mistakes can mean the difference between a great retirement and a shaky one.

    MarketWatch
  • Rebels release train with bodies from downed jet

    HRABOVE, Ukraine (AP) — Bowing to international pressure, pro-Moscow separatists released a train packed with bodies and handed over the black boxes from the downed Malaysia Airlines plane, four days after it plunged into rebel-held eastern Ukraine.

    Associated Press
  • 6 Money Lessons You Should Have Learned Before College

    In a matter of weeks, the class of 2018 will be...

    Business Insider
  • China's Xi eyes increased investment in Cuba

    Chinese President Xi Jinping met his Cuban counterpart Raul Castro in a visit to expand investment in the fellow communist nation, his last stop on a four-country Latin American charm offensive. Cuba, the only one-party communist state in the Americas, began opening up its economy in 2008, but has…

    AFP
  • Channel your Love of Games into Game Creation

    Full Sail University offers a variety of gaming degrees, including Art, Design, and Development.

    AdChoicesFull Sail UniversitySponsored