David C. Farrell, a giant in the retail industry who led the former May Department Stores Co. through years of profitability and growth, died June 5 in St. Louis. He was 89.
Farrell served as May Co.’s chairman and chief executive officer for 19 years until retiring in April 1998. He’s credited with shaping the modern day department store, pioneering matrix buying that requires vendors to meet strict sales and profit targets, thereby narrowing the list of vendors that make it into the stores, and running highly productive and tightly managed department stores. He was at the forefront of big brand marketing, acquisitions, consolidations and aggressive cost management.
He also did well by stockholders, who saw their shares rise significantly during his tenure. An investment in May Co. over the period of Farrell’s 19-year CEO stewardship would have given shareholders a total compound return of 18 percent annually. Profits were often driven as much by cost controls as extraordinary sales productivity.
The late Sam Walton, founder of Walmart, once called Farrell the best retailer in the country.
“I had great respect for him,” said Jane Elfers, the president and CEO of The Children’s Place, who worked for Farrell when she was executive vice president of Lord & Taylor, a former May Co. division, before she rose to CEO of L&T. “He could strike fear in the hearts of executives, but it was in a good way. During his store visits, you better be sure you knew your numbers, but after the walkthrough, you learned so much. His attention to detail and capacity for numbers was amazing.”
“I studied what he did,” said Allen Questrom, the former CEO of J.C. Penney, Macy’s Inc., Neiman Marcus and Barneys New York. “He was a transformational guy, but very very private.”
“He was a great merchant and mentor to so many retail leaders through the past 40 years. I learned more from David than anybody else,” said Ken Hicks, executive chairman of Academy Sports + Outdoors, and a former May Co. executive. “We all became better merchants because of him.”
Hicks said that among the most important lessons he learned from Farrell was to “identify the big idea, buy it like it was a big idea, and present it like it is a big idea.”
Farrell was a workaholic who micromanaged and had an authoritative management style, often labelled dictatorial. He set a strict culture at May Co., looked at the best ideas in each division and exported them to other divisions, and generally took a centralized approach.
Yet he was admired throughout the industry, managed to attract top-flight managers and merchants who were critical to the company’s long-running success, and were well compensated for it, and he was feared by competitors. Under Farrell’s leadership, May Co. grew from 103 department stores with $1.7 billion in sales and $95 million in earnings to 369 department stores with $12.5 billion in sales, and earnings exceeding $750 million.
A May Co. career man, Farrell was reputed to work 80-hour weeks, conduct after-midnight store inspections, and then return to the malls on weekends to check out the competition and more of his own stores. As the story goes, even at Sunday football games Farrell attended with his family, he packed some paperwork. He was a big fan of the Pittsburgh Steelers.
At the time of his retirement, the notoriously press-shy Farrell said in a statement: “I have thoroughly enjoyed my tenure at May. I have had the privilege to work with the best talent in the industry and, together, to build one of industry’s strongest department store companies. I leave May with accomplished and committed people throughout the organization, confident that the company is in excellent hands.”
Farrell was born in Chicago in 1933. He met his late wife Betty at Antioch College, and they were married in 1955.
After graduating from college, Farrell joined the St. Louis-based May Co. in 1956 at the Kaufmann’s division in Pittsburgh. He held numerous merchandising positions at Kaufmann’s through 1966, rising to vice president and general merchandising manager. In 1969, he became a corporate vice president and president of Kaufmann’s. In 1975, he became president and chief operating officer of May Co.and became its CEO in 1979. In 1985, he added the title of chairman.
He led May Co. through a string of acquisitions in the Eighties and early Nineties, most notably the merger with Associated Dry Goods in 1986. It was one of the largest mergers of retailing companies of the decade, involving an exchange of stock roughly valued at $2.7 billion. As a result, May Co. grew to include 303 department, specialty and discount stores.
During his tenure at May Co., Farrell spearheaded several other department store acquisitions including Foley’s, Filene’s, Thalhimer’s, Wanamaker’s and Strawbridge & Clothier, among the major purchases.
He also made one of May Co.’s most difficult strategic decisions – focusing entirely on department stores. That meant shedding such major operations as Venture, Loehmann’s, Caldor and Payless ShoeSource. By disposing of May’s off-price, specialty and real estate interests, Farrell brought a much stronger focus on department stores.
While May Co. consistently generated strong profits with Farrell at the helm, the company hardly stepped out in fashion or in visual display and architecture. The approach was largely cookie-cutter. What May Co. lacked in visual and architectural excitement, it made up for in efficiently moving merchandise in and out of the stores, particularly big name brands. Farrell ran a well-oiled promotional machine, taking sharper, earlier and more disciplined markdowns.
Whatever Farrell demanded, he got. Even pot-bellied teddy bears. He was so intent on presenting hot items, that once in the early Eighties, he wanted all of his divisions to have big presentations of a certain portly bear. But it was an import item out of Korea with limited availability to the stores, and Farrell was about to start one of his notorious store tours. The staff at the Hecht’s division in Washington, D.C. became desperate.
As the story goes, Hecht’s staffers pulled together all of the big bears they could find from different branches, enabling the staff to make one major presentation at the first store along Farrell’s itinerary. He loved it.
As soon as he left, the staff loaded the inventory on trucks that raced ahead of Farrell and beat him to the next store on his tour. Another major presentation was hastily assembled. The same bears moved from store to store, and Hecht’s officials were in the clear, until Farrell discovered the scheme. But as one witness said, Farrell didn’t fume over it.
After retiring, Farrell devoted much of his time and resources to supporting the greater St. Louis community, including Washington University. In 2000, Farrell and his late wife, Betty, in partnership with May Co., established the David C. and Betty Farrell Distinguished Professorship in Medicine in Washington University’s John Milliken Department of Medicine. The Farrells also provided the leadership gift to build the state-of-the-art Farrell Learning and Teaching Center on the medical campus.
Among his many other community activities, Farrell raised funds for Pope John Paul II’s visit to St. Louis in 1999, supported the St. Louis Symphony and the St. Louis Art Museum, and served as chairman of the Danforth Circle Eliot Society, and on the Community Advisory Board of the Alvin J. Siteman Cancer Center.
The Lupton Chapel in St. Louis, in an obituary posted online Friday, listed David Farrell’s survivors as his children Mark Farrell, Lisa Heller and David Farrell; four grandsons, Theodore Farrell, William Farrell, Christopher Heller and George Farrell-Urvoaz, and his sister, Anne Boho.
The chapel indicated that the family will receive friends at a reception at the Bogey Golf Club in St. Louis from 4 p.m. to 6 p.m. on Thursday, and that the funeral and interment will be private.