Millard Drexler on Why ‘Growth Is the Enemy

The Business of Fashion Podcast

The Business of Fashion

Fashion & Beauty, Business, Arts

4.6 • 770 Ratings

🗓️ 15 May 2020

⏱️ 43 minutes

🔗️ Recording | iTunes | RSS

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Summary

The New York-based “merchant prince,” best known for his time at J. Crew and Gap, is now watching the American retail landscape crumble as brands and retailers struggle under store shutdowns and debt restructuring. He did offer some advice, and warnings, on the state of American shopping, and what it might look like after the pandemic.

“If you’re not a micromanager, you’re not doing your job well,” said Drexler. With too much assortment, and too much retail space, brands need to determine what’s necessary and get creative with their offerings. This same practice should also be applied to wholesale accounts. “Own the brand, don’t let someone else put it on sale, and you’re safe,” he said.
Rethink what growth means for your brand. “Growth is the enemy,” said Drexler, looking to the rise of VC-backed brands that have struggled to successfully scale and break even. Now is not the time to pursue top-line growth at the cost of profit margins. “That’s what investors want, and they’ll do dumb things to get there,” said Drexler. “More is not better, the new big is small in my mind.”
The American department store’s make or break. “It’s pretty much near the end,” said Drexler. There’s no reason for them, he argued, unless the assortment and store curation are unique and compelling: “I’m not impressed [and] I haven't been for years with the choices out there.”

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Transcript

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0:00.0	There's been for 20 years or so, too many retailers, too much inventory.
0:13.0	There's just too much square footage for human being in America.
0:17.0	It always has been. That's one thing.
0:19.0	Lack of creativity, I think, is another thing.
0:22.6	What you get is just a deflationary trend in retail, and I think we've been going through that.
0:27.6	Do we need department stores anymore in the age of Amazon and the internet? What role do you think a department store serves now?
0:34.6	It was a matter of profit, not a matter of how big
0:37.8	can you get and how much volume can you do. And it's kind of like this endless amount of opening
0:44.0	stores are looking for opportunity. And they always would say every three years, this is not the
0:49.0	end of the department store business. Well, it's pretty much near the end.
0:55.2	Hi, this is Imran Ahmed founder and CEO of the Business of Fashion, and welcome to the
1:00.0	Bof podcast. This week on Bof Live, I sat down with American retail legend Mickey Drexler.
1:05.6	Now, the American retail environment has been buffeted by the coronavirus crisis, with retailers
1:10.7	from Neiman
1:11.3	Marcus to JCPenney, J.C. Crewe and The Gap, all struggling in the face of a once-in-a-lifetime
1:16.7	economic and public health crisis. I spoke to Mickey about how American retail ended up here
1:22.4	in the first place, how he sees consumer behavior changing, and what the retail landscape
1:27.4	might look like when the pandemic is behind us.
1:29.9	So here's Mickey Drexler inside fashion.
1:40.0	Hi, everyone. This is Amron Ahmed founder and CEO of the the Business of Fashion and welcome to B.OF. Live.
1:48.1	We have a legend with us today for B.O.F. Live. I'm pleased to welcome Mickey Drexler, the former CEO of Gap and J. Kruh. and kind of a legend in the American retail and fashion world.
2:07.5	And I caught up with Mickey briefly on the phone about a week ago and asked whether he
	...

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