Episode 38 (Part 1): Mickey Drexler - Former CEO of The GAP & J. Crew

0:00This week on Generating Alpha, in an episode unlike most, I'm joined by Mickey Drexler, one of the most legendary figures in modern retail and brand building. Known as the Merchant Prince, Mickey transformed Gap into a global powerhouse, turned J.Crew into a cultural icon, and has advised some of today's most influential consumer companies, including Apple. Few leaders have had as profound an impact as he has on how we think about brands, style, and the consumer experience. Now, you might be wondering, why feature Mickey Drexler on an investing podcast? While he doesn't come from Wall Street, Mickey offers invaluable lessons on leadership, culture, and the art of building enduring brands.

0:39His insights cut across industries and speak directly to anyone who's trying to create something that lasts. That's why this is part of my first two-part series for him. In this episode, we explore Mickey's early life and what shaped his relentless curiosity, the rise of Gap during its golden years, and how he developed his instinct for spotting and shaping cultural trends before anyone else. More importantly, we dig into his philosophy of leadership, how to hire, how to inspire, and how to build organizations that stand the test of time. the second part of this two-part series is coming out in two weeks if you enjoy this conversation please follow the podcast and rate it a five star on spotify subscribe to the youtube channel and share it with anyone who would find mickey's story as inspiring as i do thank you and i really appreciate it thank you for coming on i really appreciate it well it's my pleasure amir i've been looking forward to this since you called me the eighth time to come on so uh but you have pretty good credentials and uh you know i'm i'm excited to schmooze i'm very excited to schmooze as well and i want to start this schmooze from the beginning so tell me about your childhood how did kind of growing up in the bronx and the relationship you had with your father shape kind of your perspective yeah and you probably heard my comments about him right Yes.

1:58And I grew up in the 40s and 50s. Well, I lived there in the Bronx through a high school. And I lived very, you know, now it's not the way you say a lot of people live. But then the Bronx, Barnes Avenue, was a very kind of, I don't want to call it a working class family neighborhood, but it was mostly Jews and Italians. It was near Allerton Avenue, which was our main shopping street. One elevated stop north of Pelham Parkway, which most people know because Bronx Zoo, a hospital. I had one aunt who lived there. Anyway, we lived in a ground floor apartment. It's kind of noisy because everyone used to play handball or ball in the courtyard, which I lived on.

2:57And so I wouldn't trade it. Now, you know, when you check dots backwards, you always see what the miserable times might have been good for, how they helped. But my father was not a nice person. It took me many years to admit that. But I was a Jewish family. I went to temple on the high holidays. the shul was exactly across the street from my building. And now it's a mosque, but that's been for years. And of course, neighborhoods change. So my mom was ill from when I was born. She got breast cancer. And so she had a very depressing early life and she passed away. It took 16 years. But my three aunts, it was like a kibbutz down the street.

4:05My three aunts and seven cousins lived, one in Pelham Park and the other two in my grandparents' house, two floors, one of my aunts' little grandparents and her family and the other on the ground floor of the house. So that was my family in a sense. I hated being at home because now a lot of this is hindsight. I didn't like being at home because it was very hard dealing with my mom and because she was very depressed. She always worked. She was a secretary to the head of YMHA in the South Bronx. And my dad was a wannabe big shot, but he was not successful. He worked in the garment business, in the shipping room.

4:59He bought buttons and piece goods, and he acted like a big shot. He really, he was probably on the spectrum, but I didn't know what that meant, nor did anyone in those days. And he wasn't kind. He wasn't warm. He was a big shot in his own mind. But I saw through that. But, you know, he forced me to work, which was OK, on the weekends in the garment business for his boss. So I always had a working discipline. And, you know, when I went to as a kid. Well, I worked when I was in grade school, stored in towels. My uncle delivered towels. I don't know if you read that or not, but then I went to Bronx Science.

5:49Thank God I got in and made a big difference in my life because I was the first one and the only one of eight Jewish cousins in the sixties who went to college, which is kind of rare in those days. And I delivered the New York Times at Bronx Science Annex. I lost my job six months later because we moved to a new building right next door to D. Wood Clinton. So I went there. I really, as I said to the, I spoke at graduation two years ago. and I didn't tell the students, mostly first generation, that because the parents wouldn't have, they would have booed me out of the auditorium if I said, well, I didn't like science.

6:40I was intimidated. I didn't have confidence as a kid. And I told them that, I didn't tell them I didn't like, I certainly didn't tell the graduating class that I didn't learn anything in college And I don't, this is true. I don't care where people go to college. They don't learn to do most things in college. And I was very, I lived in my fantasies, mostly imagination, because I wanted to escape my early life. And that lasts, you know, you don't escape easily. But I never kind of felt like a victim. I wasn't at Bronx Science. I felt not smart because, you know, Phil Heller, who sat next to me, every test was an A+.

7:36I stopped asking him. And he wasn't the most exciting, warm guy, but, you know, A +, whatever. And then I ended up, because my mom had passed, my father really didn't pay attention. So I went to City College for two years. and I did that because I didn't know where else to apply. I didn't do very well in my board scores, which disappointed me, but I took them again and I did very well. I was very pleased about that. I didn't have a lot of self-esteem, but then, you know, I really, whatever, but I got into science on the test. So that was something. People think everyone that goes to a good college or Bronx science is extra smart.

8:21Sometimes your school's smart, your street's smart. I didn't have the patience to listen in school. Oh, the other thing with my father, big shot that he was, I used to work in the shipping room there. And one day they asked me, whoever they is, to take the payroll to the bank. So I'm thinking, wow, they give me the payroll. Everyone's pay is in there. I take the freight elevator down to 37th and 8th, where as I tuck in to the freight elevator next door, I go through the payroll. And I'll never forget this. My dad, who was a big shot, quote unquote, was one of the lowest paid people at Jill Jr., which was the women's coat company.

9:14and I was devastated. But it was good because then my fantasy was punctured completely. He is what he is. And I always hoped that he could be a boss, he could be this, and then I wouldn't have to worry in my life. But it is what it is. And you know, all these little setbacks you had, it's all part of growing up. It's part of the game. And so I went to City College for two years. I had to escape because my father remarried. I don't want to go too much into this, but let's say it was not a description of what I'd want a step family to be like, you know, like whatever. And so I moved to a suburb of New York.

10:06I'm disguising where it is. They had a ranch house on the railroad tracks. And the family was whatever. Anyway, my second, I was, I guess, 19 when he remarried. I was a sophomore at City College. I was commuting, you know, subway, it didn't matter. I mean, who knew from whatever. And I felt I had to escape. And I needed to leave, get out, do what I have to do, because I was extremely unhappy there. And I'll tell you some off the record crazy stories. Anyway, so I applied. I didn't know where to apply to college. Some guy I knew, son, went to Buffalo State School. So I applied. Thank God I got in.

11:01And I escaped. Thank God. And that was another. There's all these turning points in your life. Bronx Science. escaping having a miserable childhood i like adversity i i look today to to people who have had adversity unlike most of the people i kind of know and uh you know but i i interview everyone i've always interviewed tons of people and and you can interrupt me anytime you want by the way and I look you know I used to be very impressed with fancy schools I didn't know any rich kids growing up until I went to overnight camp now rich in those days in the 50s or 60s could have been a Cadillac convertible but I hadn't been out I used to go to the Catskills every summer bungalow colonies and I never knew that there was a better life out there until I knew You know, I visited a friend in Riverdale.

12:05I said, oh, my God, this is fancy. But I always had this inner drive, I guess. And I got hit down, whatever. I bounced up in hindsight. Because when you're going through all this, I mean, what I lived through in my early life, I kind of thank in my second half of my life. But, you know, I was pretty scarred as a kid. but I got by and I, you know, I, in school, I just wanted to pass. That's all I cared about. I didn't have patience. There's a Yiddish term called spilkis. It's ants. Are you in the tribal? Are you a tribal member or not? I'm a, I'm a tribal member. I'm a, I'm a mirror. I was thinking I have a friend named Amir, but in any case, so I was not a student.

12:59I did go, so I moved to this suburb, miserable. I did that, lived there for, well, one year, and then I had to get out of town. So I went to Buffalo, and I really enjoyed it. I lived in a kind of a little student apartment behind the optician store. Parking lot was Kentucky Fried Chicken. But I was away and that was a great escape for me. But I always had depressive tendencies, no more. But in those days, I guess I had a right to have them. So two years at Buffalo, and then I moved back into the place I was living. Needless to say, I wasn't happy. And my dad was just not, I could tell you stories, but those are off the record.

13:52They're really big tells. I met my wife, Peggy, in Boston. I went to Boston University Business School. I didn't learn anything because I didn't really, I wasn't a student, but I avoided the trap. My friends either became teachers, National Guard, or they kept their education going. So I did that. And when I graduated, my first job was Bloomingdale's. And I don't know if you want to continue, but that made a big difference in my life. You know, there's so many things that you look at that played a role again connecting dots back where you say gee if i would have had that job i would have been miserable i'm glad they underpaid me and in a company i worked a summer and and you know you just go through it and i think that's true of everyone everyone today i don't know about you but they're trying to figure out their life yeah i agree when they your age The precious crazy and the kids, you know, my grandchild, their doctor, they have to experience everything on the experiential list.

15:10You know, my first time on an airplane, it's fine. I used to go to Bungalow College in the Catskills in the summers or overnight camp. And I wasn't on an airplane until, I guess, 20 years old, going to Miami with my dad, who then met his future wife there. And so I got a job at Bloomingdale's. I met Peggy. I was young. But in those days, you're kind of married young-ish. And now it's old-ish. uh and uh i you know i she was my family we married a couple of years later and she still is my family and and my kids and my close friends so uh and my three aunts i was very close to but i thanked them a lot for the uh you know for the support the love and they built me up in a nice way.

16:09So anyway, go ahead. And I'm interested in that concept of connecting dots backwards. So if you were to kind of connect the main dots of what made Mickey Drexler what he is today over your entire career, whether that be Gap, Old Navy, J. Crew, Alex Mill, take me through a couple of those dots that you think were most pivotal to who you are today. Yeah, by the way, you know, that's famous in Steve Jobs. By Steve Jobs, yes, Stanford speech, yes. And I loved Steve for the 16 years I was with him. Enormous respect. And he didn't have a fairytale ending and whatever. And he knew that, by the way. Of course he knew.

16:48Anyway, tell me the question again. If you were to kind of connect the dots backwards, you were talking about the dots backwards. What are the most pivotal dots that you think really shaped you? That's a good question. You know, the good and the bad and the ugly. Pivotal was growing up with a father who was cold, not nice, and with a mother who was very depressed with serious cancer. So that's a dot, living in a foyer area. You know, the way I grew up and I walked to school when you were five years old in those days, and that made a difference. The way you grow up and when I interview people today or meet young people like yourself, I don't ask them about grades, board scores.

17:36And what's a little negative for me, and I couldn't say this at the Bronx Science graduation, I don't care where people go to school. And I do have a built-in bias against fancy kids, of which one could say, my grandchild, my kids, they grew up, you know, with all the things. And I love the immigrants who work hard. And I identify with them. At work here, I interview. We're small now. And even in the big companies, I interviewed everyone. And I felt either the good or the bad. and it took me five minutes. Today, I'm confident enough to say it's five minutes energy. They're a little nervous. They're not cocky.

18:22They're this, as they should be on an interview. But it takes me no more than five. A schmooze, it's like I met them casually. Because when you meet someone casually, you kind of know if they're fast or not fast. And of course, you make a lot of mistakes. But all these little things made a difference. I had a summer job at A &S and they, on their MBA program, whatever it is, you don't learn anything on training programs. You learn something from great bosses. You learn something if you're a great detective. And I'm a detective. Everything I do, and I'm addicted to detective true crimes because good detectives solve the murders.

19:07And small towns don't have enough experience with murders or whatever. so and i'm addicted to true crime podcasts so i um so i'm trying to think of where i go off on tangents all the time so you'll edit this out yeah but throughout your career what after your childhood whether that be gap old navy j crew alex mill okay okay biggest thoughts yeah okay here here's what happened i worked and these are all important things i worked at abraham and strauss crappy discount department store, summer MBA, good salary, a guy I knew in my class, and I was offered a job. So a guy I knew in my class, didn't know him, he wasn't a friend, asked me to fix him up with the HR guy.

19:56Good guy, I know him. I thought they liked me a lot, but what the fuck. Anyway, so I fixed him up, and then I ran into him. I don't know if he was in Boston. And I said, how'd it go? He goes, oh, I got a job offer$11 ,500. I was wild. I got$11 ,000 offer. And you know, when you don't realize the message, I was furious, I was pissed off. I understand now. I made the right decision. Why? Because if that's the way they are, I'm glad I went to work for Bloomingdale's, which was by far a very good decision in hindsight. Fashion company, I had a woman who was kind of mentored me. She was a fashion director.

20:43She should have been the CEO, but in those days, women were kind of, you know, not people. But Katie Murphy was fantastic. And I spent six years there. And I loved my first two or three years because they accelerated me. I was running a business my third day there. They signed me. And it all came natural. I was a buyer in the Lexington level. I was 23, 24 years old. And I had the open to buy. And I had, in those, I guess I remember now, obsessed, fast, urgent, worried. And I get on the subway to go to the garment center market. And I bought the goods. I had a very nice boss, Stanley Stern. He was a lovely guy.

21:32But I think I started to learn, again, in Hans, that you're born with certain things. You can't learn style. You can't learn. Like I look at symphonies. I love symphonies. I see the conductor going like this. I don't know what he's waving the sticks for. but there's certain things you're given, you're born with. I do a lot of DNA interviewing because I want to know where the parents are, what they did. In my case, I'm not sure where it came from. My grandfather was a tailor, but who knows? My father worked in the garment business in a very low level job. But anyway, the differences were in terms of a career.

22:25So I took a job at Bloomingdale's. Thank God. It was a whole different thing. It was an exciting company in those days. In fact, we do business with Bloomingdale's, the small company I'm involved in. And so I took a job at Bloomingdale's. I'll never forget. I was so turned on. And I was there. I was the fast. They tell me I was made the buyer level faster than anyone. And I guess I didn't appreciate. I was nervous every day. But I also acted. I looked at the figures. You know, in the room, I was department 381, 383. You would have thought I owned the company. If I didn't make my sales, I was upset.

23:17And I looked at my two departments I ran, and I always wanted to do well. I think I was battling the not doing well at home, at Bronx Science. City College was fine, and Buffalo I liked escaping. I did that for six years. but one thing I learned very strongly over time, you know, when you're young like that, you don't realize I didn't really, I hope they're not listening, but I really didn't. Well, I don't know who you show this to, but probably not my old friends who I didn't have, I didn't have the regards or respect for the bosses. And I couldn't articulate that. I love Katie Murphy. she was and we had a great kind of a mutual relationship she's about 15 years old as she died young and she would have been should have been the ceo but that was the world then this woman's emotional iq i like and and i found she was just lovely smart and not mercenary i you know i don't want to accuse all guys of that but uh anyway so i did that and then at the end i said you know, I got to get out of here.

24:39I didn't want to do, and I was 20, I guess I was 28. I didn't want to do, I looked at the proxy, was then Federated Department Service. And I said, I don't really want to do what the CEO does. It's not fun. And I also, I didn't have a mad, crazy mission to get rich. But I looked at the financials. I said, I have to wait 25 years. I had no sense. Look, a lot of money then was not a lot of money. But for me, it was having a car and whatever. But I said, so I quit. I get recruited by Macy's, and they did a brilliant job recruiting me because the big shot there who was a big shot in in that world recruited me personally I always learned from that he got me quick he called me at work I was working in the ranch in Stanford Connecticut and then he I went to his apartment and then I quit in a year and a half because it ain't what I would hoped it was gonna be yeah and and you know most companies and nothing against Macy's or Bloomingdale's, most people in big corporations suck up to their bosses.

26:02And do you know who has the best description and the best review of a boss? Their subordinates. And no one ever asked me what I thought of this, that, or the other one, but it really impacted my career, thank God. And I was looking for someone to inspire me. I always say today, if you can hire your boss, do so. I also say today, it ain't the biggest deal if you know what you want to do. Kind of the flow takes you to a degree. I worked in the Garmin Center. I loved the job. And I like the action in retail. So anyway, I went to Macy's. It's a funny story. not really, but Peggy, I stayed a year and a half.

26:49It wasn't the culture I wanted. It was, again, got to treat the boss well. And the boss has an obligation more so to treat the people well. But I couldn't articulate what it was, but I didn't have a great sense for the people I worked with. Now, no offense, I had some good ones. And if you have a million people seeing this, I'm going to deny everything. I quit in a year and a half. And then I made a big mistake. Again, I didn't know what to do. I went to work at A &S, Abraham and Strauss again, because it was part of Federate. They recruited me. And there I am, four and a half years. I had no idea what to do with my life.

27:38And I just wanted to kind of make a nice salary. I was funny. I lived in a fancy parking building in a back cut up apartment, paid 45 ,000. I figured I'd get the address. Now I was on the board. I was the young whoever on the board. And I couldn't afford to live in that building ever on the apartment I wanted. So I'm thinking, what do I do? I'm 34 years old. I'm making decent salary, but whatever not. And I just wanted to live in a nice apartment. Anyway, I get a call from a woman. I always had this great relationship with my woman friends who were quite a bit older and more experienced. She recommended, oh, I don't know what happened.

28:30I'm sorry. I left the business out. So I went from A &S and I became the CEO of Ann Taylor. Now, no one ever puts that on my thing. And a big deal. I said no twice. I had a dinner with a friend of mine, fancy, rich, but I admired him. He was smart. He said, what's going on? I said, I turned down the CEO job at Ann Taylor twice. He said to me Sunday night, he said, take the job. He says, I'd rather be the president of a$25 million company versus the vice president of$500 million. That, and I knew for a fact, he didn't have much regard for my boss, the CEO. But he didn't say that, and I knew it because I had lunch with him.

29:20I introduced him. He's one of those guys you wanted to meet. And next morning, Monday morning, I said, oh, shit, I hope they didn't find someone for the job. I called Manny, the president of the corporation. I said, is the job still open? He said, yes. I said, I'm joining. Changed my life. Here I am, 20, 35-ish, running small company, but 25 million. Well, then it must have been the equivalent of whatever. You know, 23 stores, losing a lot of money. The founder, Richard Liebskin, kind of left, and he had a lot of other things to do in his life. and the pressure was on me because they said, I'm going to forget, my boss, Manny said to me, you know, if we don't turn this around, our board of directors is not going to let us buy any more companies.

30:16You know, it was hugely successful. I went in, I followed my instincts. I didn't have any training. I didn't have a mentor, but I just did what was inside of me. You can't take an injection to do what I do. You can't take medicine. I think the DNA factor, whatever that is. Now, the drive was always there. Huge drive to escape. I was very competitive. As my friends told me later on, my grade school friends, my high school friends, I was a great athlete. I never felt I was a great athlete. and they said, you were the most competitive kid at PS76. I think I was trying to not be my father. That's my current thing.

31:05And I wanted to succeed. But I didn't, not in an obnoxious way, because I was always, I didn't want to play the, even now, like I don't play the card. Now, you know, people know who I am. They know what I do. But I still identify always with people who are struggling, or if it's the waiter, the taxi cab driver, an immigrant, they work hard. And that was the world I grew up in. You know, I was the only one in my, I think my family on my mother's side who went to college, eight Jewish cousins. And there I was, the only one, and I was the second oldest. But none of them, you know, go figure it out.

31:50There was no educational ethic in the sense of that's the right word. And thank God I got into science. Everyone went, the Jews all went to city college. I didn't know anyone in fancy. And if you lived in Riverdale, you were the fancy one. I had one close friend. Oh, my God, a three-bedroom apartment. Anyway, so Ann Taylor, I spent four and a half years there. I learned a ton. I'm speaking at Parsons School of Design tonight. I love speaking to students because no one tells them the truth. In fact, CEOs, when you read, no one speaks the way CEOs speak on the TV or in the earnings reports. No one ever talks that way.

32:36Everyone has a PR person writing this, that. I just do it. And it's funny. To me, the world is getting so back to being authentic or desperate to be authentic because everyone, I mean, you look at the lack of creativity on creative things like, again, marketing and advertising. And I'm a big critic of myself first and everything else that goes on. I'm a very tough critic. but I don't get enough and I think you know more about this forgetting my 16 years on the Apple board I used to use Blackberry in the board meetings I'm still intimidated but I don't think and this is my opinion I get attacked sometimes if I say it I think the world's gotten less creative because of technology I don't know in your world I agree with you You know, and I see the data.

33:43You know, I guess I was on whatever news business show and someone says the data. I said, you know, data is data. Data is rearview mirror. OK, I always say that you probably heard me say all these things, maybe. But I like to look through the windshield and I like to go to where the puck is going, to quote Wayne Gretzky. and one of the keys is being creative is being inventive and uh and and this creativity i mean if you're a doctor you're creative you're a good detective uh and so on and so forth so i um i left ann taylor because we were bought by a big ugly company called allied stores now what happens in the world.

34:33I don't know if you hear this from your other guests. When a big corporation buys a creative company, they take the soul out of it in a minute. Always. You see Marriott Hotels buys a fancy hotel. All of a sudden, it's a Marriott. So Allied Stores bought Ann Teller. I was the saddest day in my life. I loved my job, but I stayed for four plus years. And they were total bureaucrats. They were guys who went to the Yale club to drink. And then they wanted to be involved in the business. And this is a big tell and might not mean anything to you. And Taylor became a very hot, successful company. And but I had to leave at some point because who the hell wanted to work with these whatever so and the typical thing is they said you know until you know i have a prestigious thing you know the designer business today forget it but the prices and all that but until it became a cool business for the woman working, it was just cool.

35:45And we had a, and they asked me to put on every shopping bag, a unit of allied stores. Now, I don't know if you know what that means, but it's kind of like bragging about that downscale business owns an upscale business. You know, I look at Range Rover ads. I know this is minor, and I'm a very minutiae minor operator, because you have to be, or else you don't know what the big deals are. People say, oh, you're a micromanager. Probably so. So I look at the Range Rover thing. I cut it out. I showed the team, but no one really understood. It said Range Rover, you know, they have a beautiful, fancy Range Rover.