Page 227 - Leadership Lessons of the White House Fellows

THE LESSONS

struck out into the private sector and worked as head of strategic planning,
recruiting, and organizational development at Sanger-Harris, then a division
of Federated Department Stores. His next post was as a senior consultant
at McKinsey & Company, where he helped clients in top management
positions resolve strategic and organizational issues. In 1992 he became
executive vice president of R.H. Macy and Company, launching and man-
aging a turnaround program that created $2 billion in value in only two
years and led to the company’s successful emergence from bankruptcy. He
also led the negotiations that resulted in Macy’s merger with Federated
Department Stores.
However, it was his role in reviving the iconic luxury retailer Barneys
New York in the late 1990s that gained Shull the greatest accolades and
cemented his position as one of the country’s top turnaround specialists.
Barneys, a fixture in New York City since 1923, had filed for Chapter 11
bankruptcy in 1996 and was teetering on the edge of extinction after expe-
riencing a loss of $20 million for the year. Fred Pressman, the company’s
heart and soul and the son of founder Barney Pressman, had died recently.
To make matters worse, the remaining members of the Pressman family
were at odds with Barneys’ Japanese partner company, Isetan. The bank-
ruptcy and years of financial mismanagement had damaged the company’s
hip, upscale image. Although Barneys had become insular in regard to
changes in the retail marketplace and slow to react to declining revenues,
it was clear to Shull that parachuting in with a slash-and-burn cost-cutting
strategy would break the spirit of the brand and be counterproductive.
“It’s my belief that it’s really important to understand the fundamentals
of the business going in,” Shull said, “and even though cost cutting and
that sort of thing is certainly part of a turnaround, it’s also really important—
particularly in a business like Barneys, which is all about creativity and
merchandising—to blend cost cutting and fiscal restraint with the creative
aspects. Creativity and fiscal discipline go hand in hand; they’re not
mortal enemies.”
To help Barneys salvage its reputation as a luxury retail destination for
chic shoppers, Shull was determined to emerge from the turnaround with
the company’s strong creative team intact and bolstered. Since nobody
knew the culture of Barneys better than did the members of its founding
family, Shull recommended that former co-CEOs Gene and Robert
Pressman stay on and assume vital roles as merchandising consultants. He

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