Terry Lundgren on Ownership, Change, and Retail Leadership

Episode Summary

Terry Lundgren, the former chairman and CEO of Macy’s, Inc. and former CEO of Neiman Marcus, was born in Long Beach, California, one of six children, and says college never came up at his family’s dinner table. He went to college because his friends were going. At the University of Arizona, he enjoyed the freedom so much that his grades slid, and he was cut from the basketball team after 10 days of practice. After his first year, his father, who worked in a factory assembling speakers and sold real estate at night and on weekends, told him the family could no longer pay. When Terry protested that his father was ruining his life, his father replied that it was Terry’s choice. Terry got his act together. He talked his way into a job cracking oysters and peeling shrimp at a fish restaurant, pleading for a chance after a flat interview, and three years later he was managing the restaurant while working full time and earning straight A’s. Today the Terry J. Lundgren Center for Retailing at the University of Arizona bears his name, and he co-chaired the university’s $3 billion Fuel Wonder campaign, which passed its goal in 2026.

At 29, he recalls, he became a store manager at South Coast Plaza in Orange County, responsible for 400 people, most of them older than he was, and he learned to ask what each of them needed to succeed. He credits his rise to doing more than the job description asked: bloom where you’re planted, he says, and do the job better than anyone has done it before. As CEO of Neiman Marcus at 37, as he recalls, he set out to win over the company’s legendary former leader, Stanley Marcus, who had brushed him off when Terry introduced himself at a restaurant. After months of building the relationship, Terry asked Stanley to endorse his strategy in front of 1,000 employees. Stanley did, and Terry says the strategy took hold in about four months rather than the two years or more it would otherwise have taken, followed by five straight years of strong performance.

Terry tells Adam that leadership comes down to assessing the people around you and managing them situationally, and that you don’t need the best player at every position to build the best team. He candidly describes two senior hires who looked great on paper but didn’t work out, including a marketing executive who was wrong for the company’s culture, and how he dealt with each. He explains why leaders must make it safe to deliver bad news, why indecision is worse than an informed call, and why a sign in his office read, “There’s no limit to what we can accomplish as long as no one cares who gets the credit.” He recalls using the 2009 financial crisis as the moment to consolidate divisions and restructure the company, and he describes Macy’s early, money-losing commitment to e-commerce, which he says made it one of the country’s largest online retailers by the time he retired. He also explains why he announced meaningful changes every February, even in strong years: what worked last year will only deliver last year’s results.

What You’ll Learn

Recognize that what happens next is your choice: when his father stopped paying his college tuition, Terry got his act together, went from mediocre grades to straight A’s while working full time, and learned that with his back to the wall, he could perform.

Let people see how much you want the opportunity: after a deadpan interview for a job cracking oysters, Terry was sure he wouldn’t get it, so he turned back at the door and asked for a chance, and the manager hired him on the spot, saying that was what he had been looking for.

Bloom where you’re planted, Terry says: do your assigned job better than anyone has done it before and look for a better way to do it, because that is how people notice you.

Enlist a respected voice to back your plan: Terry says Stanley Marcus’s endorsement got Neiman Marcus employees behind his strategy in about four months instead of the two years or more it would otherwise have taken.

Make it safe for people to bring you bad news, then decide, Terry says, because the CEO is sometimes the last to know and indecision is worse than an informed call.

Keep changing even when business is strong: Terry says you are up against last year’s numbers, and what worked last year will only deliver last year’s results.

About Terry Lundgren

Terry Lundgren is the former chairman and CEO of Macy’s, Inc., the parent company of Macy’s and Bloomingdale’s. He became CEO of the company, then known as Federated Department Stores, in 2003, led its acquisition of May Department Stores and its renaming as Macy’s, Inc., and served as CEO until 2017 and executive chairman until his retirement in 2018. He earlier served as chairman and CEO of Neiman Marcus after starting his career at Federated’s Bullock’s division. He has served on the board of Procter & Gamble, has chaired the National Retail Federation, and is an executive in residence at Columbia Business School.

Related Episodes

Episode 109: Former Best Buy CEO Hubert Joly
For more on retail turnarounds, Hubert discusses leading Best Buy’s turnaround through a distinct leadership philosophy and contrarian strategic decisions.

Episode 137: Former Home Depot CEO Frank Blake
For more on leading a retail giant, Frank discusses turning around Home Depot’s customer and employee experience, along with his takeaways from Jack Welch, George H.W. Bush, and Bernie Marcus.

Episode 98: Former Gap CEO Mickey Drexler
For more on building iconic retail brands, Mickey discusses leading Gap and creating what is today Old Navy.

Episode 191: The RealReal Founder Julie Wainwright
For more on creating a new retail category, Julie discusses her journey founding The RealReal, along with entrepreneurship, hiring, growth and scale, and overcoming adversity.

Episode 333: Culinary Legend Wolfgang Puck
For more on starting at the bottom, Wolfgang discusses leaving home at 14 for a cook apprenticeship in Austria and becoming one of the world’s most recognized chefs and restaurateurs.