Marvin Traub (part 5)

… back to Part 4 – Being Different—Bloomingdale’s Transformation

Defining Moment: Retailing is Entertainment

The thing that really set Bloomingdale’s apart from any other store in the 60s, 70s and 80s was that it was fun to shop there. And what set Marvin Traub apart from other retailers is that he developed the idea and made the decision to make it that way.

“We developed the idea that a store should be entertainment, not just a place to buy a suit and a shirt or a tie. At the same time that tied in with another belief that to have different products than the other stores, you had to train a team of buyers to go to Italy or France or the UK and develop new products or find suppliers who weren’t selling goods in the United States.”

By 1960, when Marvin headed home furnishings, Bloomingdale’s had been sourcing items from overseas for several years, but until then, there hadn’t been any really successful promotions to highlight those items and to increase traffic in the store. In 1960, Bloomingdale’s made it all more exciting with a promotion called “Casa Bella”, or beautiful home.

“Casa Bella” brought together all types of home furnishings from Italy. The stars of the promotion were the seven magnificent model rooms featuring canopy beds, formal desks, high-backed chairs, over-stuffed couches and chairs—a breathtaking display of luxurious old-world items, suddenly available to the American people at department store prices.

The promotion garnered exceptional media coverage, including a story in Look magazine, brought customer traffic into the store and, most importantly, was a tremendous success on the sales front. Some 40 years later, Marvin says that he still comes across some of the furniture originally sold as part of “Casa Bella” when he visits homes in the New York area.

A couple of years later, now in charge of merchandising for the entire store, Marvin decided to expand the promotions outside of home furnishings to include men’s, women’s and children’s clothing. At first, promotions were focused on concepts—like “Romance Everlasting” in 1962 or “Art Beat” in 1969—but then centered on countries.

By the late 60s, Marvin became more interested in developing products from Asia. “I was particularly fascinated with India and Thailand and the Philippines. So, we did promotions. The countries were fascinated and thrilled to have us. They were all similar India—poor and struggling and selling cheap textiles—and we looked for the best of India and our buyers helped them sell the products. So, this really turned out to be a very major force in creating the Bloomingdale image, giving us exclusive product and creating exciting events, all at our store.”

Country promotions were held annually through the 60s before taking an eight-year break between 1970 and 1978. But that didn’t stop the big Bloomingdale’s promotional train from charging ahead. Marvin and his team developed the knack for developing ideas and delivering outstanding results. “I’ve been fortunate in that I like to be creative. My wife tells me I’m a frustrated producer! But I enjoy staging big events—being able to do it and having a vision that can tie together. And I believe publicity is more credible than running a newspaper or magazine ad, but in order to get the publicity you need something worthy of it. And we had that!”

They certainly did! Few people would have the creativity and confidence to pull off a coup like Marvin did in 1976. In late 1975, the Queen of England had announced that she would be visiting the United States the following year. Ever the creative thinker—and obviously quite an optimist—Marvin thought that it would be great if she came and visited Bloomingdale’s. “People asked how I got the Queen of England—the truth was I called the British Ambassador and said ‘How do I get the Queen to come to Bloomingdale’s?’ He said, ‘You invite her!’ So, I sent a letter and the Queen accepted. She was very gracious and we gave her a gift when she toured the store and I introduced her to young American designers named Ralph Lauren, Calvin Klein and Donna Karan.”

While Marvin makes the Queen’s visit to Bloomingdale’s seem fairly simple to arrange, that couldn’t be further from the truth. Diplomatic letters, detailed plans for the visit and the support of British ambassador and the British consul general, among other things, were needed before the Queen accepted. And as to why the Queen chose to visit Bloomingdale’s rather than the countless other attractions in New York, Her Majesty told her husband, Prince Philip, “I can visit a museum anytime, let’s go to Bloomingdale’s.”

The Queen’s visit, which gained national and international television exposure, continued to solidify Bloomingdale’s reputation. That reputation would continue to serve them well for years to come, particularly as Bloomingdale’s resumed their country promotions.

Another prime example of Marvin’s ability to create an event is the “China Passage” shop in 1971. At the time, Marvin had read that the United Nations were considering the entry of the People’s Republic of China into the UN. Now, wouldn’t it be interesting for Bloomingdale’s to be the first store in the United Sates to carry Chinese products, and what if that happened on the same day China entered the UN? Marvin thought so! There was a trade embargo at the time, so buying product directly was impossible, but Marvin knew of a French exporter, François Dautresme who had a shipload of goods to sell. Marvin sent Bob Meyers—the Housewares Merchandise Manager—to Paris. Meyers bought the entire shipload, sight unseen, and Bloomingdale’s opened “China Passage” the day the trade embargo was lifted and China joined the UN.

Several years later, Marvin received an invitation from the Chinese government to visit China. During that visit he worked with the Chinese to plan the largest ever promotion of Chinese products in the United States. “When you look today at how China dominates the world markets, in 1980 when we went to China, that was the beginning of China’s increasing importance in supplying consumer goods to the world.”

On that trip to China, Marvin and his team had been guests at the Forbidden City Museum, the major museum in Beijing. As part of their tour, they were shown a collection of robes worn by the royal families of China. They were priceless and had never left the museum, but Marvin saw an extraordinary opportunity and instructed his team to try and get the robes for the country promotion. As a sign of the Chinese government’s good faith, the efforts of Lester Gribetz and Barbara Darcy, and no doubt the reputation that Marvin and Bloomingdale’s had earned, the Director of the museum agreed to let Bloomingdale’s borrow the clothes. “The museum had never loaned them out before to the Louvre or The Met, but loaned them to Bloomingdale’s.”

Bloomingdale’s raised half a million dollars from Mobil Oil to build cases to transport and protect the clothes, and they became the central attraction in “China: Heralding the Dawn of a New Era” promotion in 1980. But it was Marvin’s concept of the store as theatre or museum that helped make this promotion such a success. 

Going National and Then…

Soon after Marvin took over as President of Bloomingdale’s in 1969, Marvin began to think of ways for the company to accelerate its growth. The flagship 59^th Street store was doing exceptionally well, and so were the four suburban stores. But Marvin concluded that in order to massively expand the company, Bloomingdale’s had to move outside its own backyard.

Marvin put together a plan to take Bloomingdale’s into key markets across the nation and outlined the critical issues to convince Federated, Bloomingdale’s parent company, to let it happen. The main problem was… no one had ever taken a department store national before!

“Department stores used to be essentially in one market. If you’re only an apparel store like Saks it was easy to move, but if you had home furnishings there were almost no stores in more than one trading area. Home furnishings were one of Bloomingdale’s strengths and I convinced Federated to let us take Bloomingdales first to Philadelphia, then to Boston and Washington. Then we went down to Florida, Texas, Chicago and California.”

Each of the store openings took place with typical Bloomingdale’s flair. For the Washington opening in 1980, Bloomingdale’s needed to come up with some sort of slogan to position itself in the area. “So, we came up with Bloomingdale’s—Like no other store in the world.” The slogan hit the nail on the head and remained with Bloomingdale’s for years to come. And to really hit home with Washington’s citizens, Marvin asked Betty Ford to cut the ribbon when the store opened. The event received national coverage and was part of a major “60 Minutes” story on Bloomingdale’s.

The next year, when they opened a second store in the Washington area, Elizabeth Taylor was there with her then 7^th husband Senator John Warner. “We’d typically hold parties for 1,000 to 1,500 people. It was all about creating great press! There was a different concept of stores in those days and its also part of the kind of unique thinking that we needed to create a worldwide reputation.”

By the late 80s, Bloomingdale’s had expanded to 15 stores and was generating incredible media attention—everything seemed to be going right until the first wave of takeovers began to rock the retail industry.

Bob Campeau, a Canadian real estate mogul, had acquired Allied Stores, a company competing with Federated in many markets. And in 1988, Campeau set his sights on Federated and put together a bid to buy the company. Marvin had his doubts about Campeau’s plan, but as a member of Federated’s Board of Directors, he was committed to accept the highest bid and Campeau had presented the highest bid. “At the time our company was worth between $60 and $65 per share, but Campeau paid $80 per share and bought the company with no idea how he was going to pay off the debt. It was one of the more challenging things I had to do as a director of Federated. I was the only director who was running a division and I didn’t believe, from what I had seen in Campeau and Allied and his plan, that he could successfully run Federated. But the lawyers for the company instructed the directors that ‘you’re not representing Bloomingdale’s or even Federated—you’re representing the shareholders. You have to vote for what’s best for the shareholders.’ So, if Campeau says it’s $80 per share, by the guidelines we were then given, we had to accept it.”

Though Marvin had his doubts about Campeau, he was still the Chairman of Bloomingdale’s and felt the he needed to stay on at Bloomingdale’s. “I thought my role was to protect Bloomingdale’s and the people I was emotionally attached to, so I decided I should get along with him (Campeau) and subsequently became Vice-Chairman of Campeau Corporation.”

As it turned out, Marvin’s doubts were well founded. Bloomingdale’s continued to perform well, but started to feel the crush of the huge $800 million debt Campeau Corporation had accumulated in acquiring Allied and Federated. Within a year-and-a-half, Marvin received a phone call from Bob Campeau to meet him in London.

There, Campeau informed Marvin that the corporation was having financial difficulties and they had decided to sell Bloomingdale’s. The decision was a difficult one for Campeau. “He loved Bloomingdale’s—everywhere he’d go he’d promise to open a Bloomingdale’s. He just didn’t have the money to do it.”

Campeau knew what Bloomingdale’s meant to Marvin, and knew that Marvin had wanted to buy the company, so he offered to support Marvin should he want to put together a bid to buy Bloomingdale’s. “I was elated in one sense. It was a great opportunity. So, in the fall of 1990, I put together a group of investors and bankers and we had a very credible bid—we bid about $900 million in the first round. But Federated had decided by then that the company was getting in bigger and bigger trouble. By the end of the year it was apparent that they were headed for bankruptcy unless they could get $1.1 – $1.2 billion for Bloomingdale’s, more than the company was worth at that time. So, in January of 1991, I had to go back to Bloomingdale’s and have a meeting with the organization to prepare them and say “today Federated is filing for bankruptcy.”

While many of his counterparts bailed out, Marvin once again demonstrated his integrity and dedication to Bloomingdale’s. “I decided that I would stay with Bloomingdale’s during the period of bankruptcy to keep faith with the suppliers, employees and everyone. I think it was very important to the employees, who I am very close to, that I stay on during this difficult period. I stayed with Bloomingdale’s until we came out of bankruptcy.”

Once Bloomingdale’s came out of bankruptcy, there was a new management at a newly reformed Federated. Marvin helped bring in Alan Questrom as CEO of Federated and on November 15, 1991, Marvin ended his incredible 41-year career at Bloomingdale’s.

Marvin stayed as Vice-Chairman of Federated for three months, but wasn’t really suited for corporate life—“I had much more fun running a division.”

Continue to Part 6 – A New Beginning