Profiles in Greatness: Rowland H. Macy

The Star of Retail
October 31, 2011

When Rowland Hussey Macy was 15, he started working aboard a whaling ship. Macy, born in 1822, had grown up on Nantucket Island, Mass.—once the home of more millionaires than anywhere else in the United States, thanks to the whaling industry—and watched his father sail on two previous expeditions.

But young Macy was a little more ambitious than his father. He earned about $550 on that first voyage, a disappointing paycheck for such hard work. So at 19, he started working as a printer’s apprentice in Boston. He had read about Benjamin Franklin’s success and decided to model his own career after the legendary statesman.

Unfortunately, printing didn’t suit Macy as well as it did Franklin, so, with the backing of one of his brothers, Macy opened his first dry goods store in 1843. Over the next 10 years, Macy failed at four retail ventures.

He had moved to California in search of gold and also dabbled in real estate speculation, so despite his retail failures, he returned home to Massachusetts with $4,000 and a wealth of new life experiences. He opened the first Macy’s store in Haverhill, Mass., in 1851.

Immediately, he put to use what he had learned from his failed stores and instituted groundbreaking initiatives in retail management. Macy offered lower prices for cash purchases in an era when most shoppers used credit, and he offered fixed prices rather than opportunities to bargain, which was the norm.

While the Haverhill store ultimately failed, the 36-year-old Macy had no intention of giving up. He moved to New York City in 1858, and started R.H. Macy Dry Goods on the corner of Sixth Avenue and 14th Street. The red star he had tattooed onto his hand during his youthful whaling days would become the shining symbol of his new venture.

Again building on lessons learned from previous stores, Macy bought and sold merchandise only if he could do so with ready cash. Even as his business grew and wholesalers offered him credit, he refused it, deciding instead to work exclusively on a cash basis.

In its first year, while a recession loomed over the country, Macy’s did $90,000 in sales. As the business grew, Macy obtained the leases of 11 neighboring buildings, creating the concept of what we know today as the department store, selling everything from clothing and jewelry to toys and housewares. In 1874, Macy leased the basement of his building to L. Straus & Sons. Lazarus Straus and his sons, Isidor and Nathan, sold china, glassware and silver (and later took ownership of the Macy’s chain when it passed from the Macy family in 1895). The china department soon became the store’s most famous. Macy introduced new products to the public as well, including tea bags, Idaho baked potatoes and colored bath towels. He also began accepting mail orders.

Despite a recession, these were boom years for Macy, who became a master of advertising and publicity. He developed marketing strategies that would one day become part and parcel of the retail industry. He was the first, for example, to have a store Santa Claus during the holidays, and he originated themed store exhibits and lighted window displays to draw customers in from the street.

Because his store was beyond the borders of the main shopping district, Macy knew he had to be innovative to draw customers, so he used his printing industry experience to launch some unique newspaper advertising campaigns. The ads emphasized keywords again and again, used bold headlines and quoted exact prices of store items, something none of his competitors had ever done. He advertised in five city newspapers. Macy also offered his patrons a money-back guarantee, and the store continued to only accept cash well into the 1950s.

Macy’s innovations didn’t end with business strategy. He was also the first to hire a woman executive in retail sales, promoting Margaret Getchell to store superintendent in 1866. Having grown up on Nantucket, where women ran family businesses and households in the absence of husbands, fathers and brothers who were on whaling expeditions, Macy believed that women were just as capable as men. His Quaker upbringing also promoted the idea of spiritual and intellectual equality of the sexes.

Getchell, a distant relative of Macy’s, was a fellow Nantucketer, and she not only had a good head for business but helped Macy understand what his main customers—women—wanted. Four years after Getchell became store superintendent, Macy’s revenue topped $1 million.

Macy died in Paris in 1877 of Bright’s disease. An obituary in The New York Times praised his accomplishments.“His energy and enterprise in business and the strict attention he gave to every detail of it gained for him a host of staunch friends,” the obituary noted. “In fact from comparatively nothing, he became one of the best known and most successful merchants of the day.”

That year, Macy’s famous department store employed 400. The Straus brothers ultimately became owners of the store after Macy’s death.

In 1902, the flagship store on Herald Square was built and, after a 1942 expansion, it became known as “the largest store on earth.” In the century that followed, the Macy’s brand expanded exponentially and has since become a household name, with more than 800 stores across the United States.

You might like