761 Marcy Syms: Author of Leading With Respect

0:00I am unwilling to give up, but I will start over from scratch as many times as it takes to get where I want to be.

0:09Kara Goldin:You just want to make sure you will get knocked down, but just make sure you don't get knocked out. So your only choice should be go focus on what you can control. Hi everyone and welcome to the Kara Goldin Show. Join me each week for inspiring conversations with some of the world's greatest leaders. We'll talk with founders, entrepreneurs, CEOs, and really some of the most interesting people of our time. Can't wait to get started. Let's go. Hi, everyone, and welcome back to the Kara Golden Show. So excited for my next guest today. We have a true retail pioneer and business leader, Marcy Sims, who is the author of the brand new, excellent book called Leading with Respect, Adventures of an Off-Price Fashion Pioneer.

1:05Kara Goldin:And such a good, such a good book. I was sharing with her when her publicist reached out to me. I was so curious because I knew the brand, but I didn't know the story. And for 35 years, Marcy was the voice and vision behind Sims, the groundbreaking off-price retailer known for its slogan, an educated consumer as our best consumer. And working alongside her father, Cy Sims, she helped grow the company into a national powerhouse and become the youngest female president of the New York Stock Exchange listed company. And in this book, Leading with Respect, Marcy shares the remarkable story and so many powerful business lessons in there for sure.

1:55Kara Goldin:So I'm very thrilled that you're here to talk to us more about it. So Marcy, it's so great to meet you and have you on the show. It's so great to meet you too. I mean, we have this two great women entrepreneurs. Yay! Exactly. Exactly. Well, so, so in awe of you. You've done such a great job. So let's start at the beginning, I guess. What inspired you to write this book? I mean, you've been a wealth of knowledge and a mentor to so many. People have looked at what you've done. I'm sure so many people have said, Marcia, you need to write a book, but you didn't do it until now. So what was the moment when you said, I need to go do this?

2:41Well, you know, I had written a book before. I wrote a book back in the early 90s, joining my dad, as I did after a couple of jobs in the family business, because he had started the retail venture with this brilliant idea of really breaking up the supply chain. And he created this idea of going direct from manufacturers below wholesale to consumers, selling to consumers at the wholesale price. And doing that, the equation, the math of that required certain things. And that's where educating the consumers came from, because this was new. How we could do this, it had to be very low budget in terms of the stores.

3:31I found that people were not remembering the contribution that my father made. Not so much, you know, myself, actually. When I went to the publisher, it was to tell the story of my dad. And his incredible generation, he was a first-generation American. He was a recipient and a blessed white male who got the GI Bill budget that allowed him to go to college for nothing and buy his first home at, you know, 1.3 percentage points of interest. And they were a very special breed. And my father and other men that I met, my father's contemporaries, many of them were entrepreneurs. So when I would go and lecture, and particularly at the SISIM School of Business, which we started with my dad.

4:28The people, the young people there, they were fabulous. They looked around, but who's Cy Sims? They didn't know. So I thought, I'm going to write this book now, not wait any longer. And it was that. And very honestly, without getting particularly political, I was also feeling after 2016 a change in our environment where the idea of respect within the business community was not getting the attention it should. I love it.

5:06Kara Goldin:So the lessons that you learn from your dad, I always say that it's important to look back and think about what those lessons teach you, right? And especially somebody who was such a master of business. If you had to name like one thing, two things that you learned from him about leadership, about risk, I mean, so many things that he did that were iconic, pioneering, what would you say to that? Well, you know, there are several things there. I've tried to condense it down to some easily digestible and memorable expressions. And firstly, I remember, and he had this in his office, a sign that said, don't let the bastards win.

6:00And to him, that wasn't a sign of aggression. To him, the idea was, you have your values. You know what your true north is, what your mission is, and stick to that. And the bad guys are those that not only detract from that, but don't share your values. Now, the reason that I joined Sims was because my father and I shared values. We both value transparency. We valued the respect for the customer, for the vendors that we did business with. And we really believed that respect was a hard value. It wasn't some soft skill. It wasn't something that some days you can do it and some days it's okay, you forget about it.

6:55It was always, it was getting Sims to be an entity in the first place meant that his relationship with his vendors, he paid cash within 30 days for when he bought something. He was able to not only stick to what he said, but get people to do things that they would not ordinarily do, like Calvin Klein, Donna Karan, Ralph Lauren. They would not ordinarily sell for below the wholesale price. But he got them to do that, to trust him because of his, not only respect for him, but doing things for them that they needed to have done. By selling Cy, they were able to, at the end of the month, they were able to show profitability where they might not have necessarily been able to.

7:48So my father also said to me, Marcy, if we go out of business, I don't know if the consumer will have too much trouble finding somewhere else to buy clothes, but I know that our vendors will have a hard time replacing us. So that was certainly one of the expressions. The other thing that was a lesson that is really a life lesson in leadership, you know, my dad made me audition for the Sims commercial that for many years I became, you know, a spokesperson for the company. And when I was doing this audition, he came out of the control booth and he said, are you nervous? I said, yeah, I am. He said, there is no reason for you to be nervous.

8:37No one's really listening and no one's really going to remember. So relax. Now, I remember telling this to a friend of mine and she said, well, that's kind of an insult. No one's going to remember. I said, no, it was liberating. Do what you need to do to get what you need to get done. Don't think about what other people are going to say or how someone is going to you do the best job you can do. And that's the best job you can do. And don't think about anyone else.

9:12Kara Goldin:So inspiring. So Sims was a family business and became a national brand. Can you talk about that? Like, when did you know that that was happening? I mean, here was a, you were a little girl, right? Watching your dad live and breathe this business. You joined him. I'd love to hear like what was that moment like when you knew that it was much bigger than that place that he just goes to do his thing? I was always listening to what he was saying because I love talking about business. And honestly, it was before I even joined the company, I thought this was a real potential rollout. This was a real opportunity for growing a brand because his vendors came to him and asked him to open additional stores.

10:09So when that happened, that was before I joined, and that was the first store that, it's a small store, it was like a 12-foot storefront in Miami, and that was from the vendor Gant, who wanted to sell short-sleeved men's shirts all year round, because they had the overage. And the other experience, once I joined, I helped my dad open his first real, the formatted store that sold men's, women's, and children's clothing that became the rollout for our 50 stores in 1978, the year that I joined the company. and we not only were able to open successfully, but there was such an overwhelming outcry from the community that we had to close the highways in both directions because of the backup from our parking lot.

11:10And then we opened a second store within two years and it did just as well as the first store in the community. What we saw was people were really anxious for this opportunity. They understood being an educated consumer. They understood that the more they knew about clothing, the more shopping at Sims made sense for them, that the value they were getting was really extraordinary. And so by then, that was early on. It was just a matter of being very disciplined. one thing that you might have the same experience one needs to understand what your business is and the rules of your business and what the format what the parameters what is the real business plan now plans are important to make but you don't have to be strictly enforcing you know the the plans You have to plan in order to know options.

12:14But the thing that you don't want to compromise on, you really don't want to compromise what is it that makes you successful. That's the value proposition. What is it that makes you successful? And with Sims, we knew that it was the number of name and designer brands that we could give the consumer at off price. We had more than anyone else, and they were the real thing. They were not degraded by being manufactured in a lesser factory.

12:49Kara Goldin:So interesting. So family businesses can be super complicated. Oh, yeah. Very complicated. What were some of the biggest challenges you faced balancing family and business decisions? It sounds like your father was very supportive of you and, you know, helped you in many ways to teach you, etc. But the family business aspect of it can be very challenging. I'd love to hear kind of your experience. You talk about this in the book, too, but can you share a little bit more about that? You know, my dad was the youngest of 10 children, and he had six older sisters. So he had come from a family situation where women were really experts in things like dating and how you kind of make your way in the world.

13:50And I always attributed that family birth order on his part as something that helped him become a feminist. And his being a feminist was a great benefit to me and how he looked at me. I was the oldest of six children growing up. He was the father of six. I was the oldest of six. And another thing that happens in family business, so many of the stories that you have about who you are happen when you're quite young. And my dad told this, I remember he gave this, I think, to Barron's Magazine or something. And he was, you know, why is your daughter president? You know, you have three sons. They're always looking to get a gruesome story.

14:40And he said, well, you know, when Marcy was young and she would take her younger siblings to the movies, I'd give her some money and she'd always come back with them being happy. And she had change. change and I thought that was a great story and I love to repeat it because it really shows that the challenge and the benefit the challenge in a family business is some of the things that you're not happy about that happened when you were younger that you might have outgrown or changed or it's hard in a family business you always have to have a different hat on when you are the oldest child. You have to put a different hat on as the CEO.

15:23These are separate roles in our life. And certainly that's something that I lived through. At one point, five of my siblings worked in the business with us. So, and three of them reported directly to me. So it was It was challenging. I'm saying going public, having to answer to investment bankers and analysts on Wall Street and having the, you know, the accountants and the monthly calls with the street was very different. And one really needs to hone both skills, getting along with family and making sure that you know that business has different rules. In business, it's not never having to say you're sorry.

16:19You remember that from Love Story? Definitely. Love is meaning never have to say you're sorry. Well, in business, you always have to explain your mistakes thoroughly.

16:31Kara Goldin:yeah so true i love the story in your book about the ten dollar coupon that saved hundreds of customers can you talk about about that and what it taught you it was a real it actually happened this was something that um if you've ever built structures you know how complicated it can get especially if you have one or two contractors who are not doing their job 100 well we already had advertise the opening of this store. And a few days before the opening, we realized that one of the subs had not gotten a sign off. And we were not going to be able to tell customers that the opening was off. So we had hundreds of people show up at the parking lot the day of the opening.

17:20And my father and I were ready with Sharpies. And we wrote everyone who was there these handwritten coupons. And we told them, even though Sims has a no coupon policy, these coupons are good for 30 days and you can come in, please, and use the coupon. And people were thrilled. They were so grateful. They really understood and they came back and we made a lot of loyal friends from doing that. But what it taught me is not just the importance of full disclosure, to tell the customers, we've got egg on our face here. This was a screw up. Thank you for being here for us. And hopefully you'll forgive us and come back.

18:10And it's important to be that humble and that real with your customers. And it showed that we respected their time, we respected their hard-earned money, and we hoped that they would come back and trust us again.

18:28Kara Goldin:Yeah, definitely. And how many people received those$10 coupons and then told many other people, right? And everything about that, I think, is so great. You also write about the escalator dividends. Can you talk about that and what does that concept mean? But also, how can other companies, how can entrepreneurs and founders maybe create them, use that concept? Actually, it's really simple. This was a bricks and mortar situation. And if you didn't get people coming into the store, there would be no selling. Well, we in a New York City location in a building that was over 100 years old had to rebuild staircases and put in an escalator in order to use the four floors of the store of this building.

19:22Well, while this construction was going on, not only was it dusty, even though we tried to contain the dust, it was noisy. It was inconvenient to walk around things. But this work was going to be several months. In reality, it turned into about nine months of construction and interruption. So we had dividends. If you walked in the store, you would hear the PA system and we would say, for all customers in the store now, we want you to know we are having escalator dividends. This means dollars off in the men's suit department. You can take$30 off a men's man's suit over$299. I'm just, you know, that's kind of, and in the women's blouse department, you can take$15 off a$50, you know, and Klein blouse nationally advertised$130, you know, and it would be almost like you were in a, well, it was a little bit like Barnum and Bailey.

20:30It was very exciting and something was always happening. And it turned out to be, although sales were depressed, we could not make up for the loss in the foot traffic. But what did happen is a lot of people heard about Sims that never heard about us before. Because people who were in the store said, you can't believe what's happening over at this SimStor, what I think entrepreneurs can learn is think about who your core customer is. Have empathy, real empathy, compassion, and understanding about your customers' lives. What resonates with them and what resonates with them in their relationship to you?

21:20And what we realized at that moment that what resonated with here's a customer taking the time during their lunch break, let's say, walking down the block and coming in, right? Whether this is down the block or on the internet and taking their time to check you out. What do you need to know about them that they're going through right now? How can you actually communicate with them right now to show that you understand them, you identify them? And I mean, one of the basic definitions of feeling respected, being respected is being seen. And so your customer feels seen. And that's a magic connection.

22:09Kara Goldin:I love that. So, I mean, it was, I loved reading that in the book because I think it's common sense, but not a lot of people think about that for sure. So you took the company, you took Sims Public. There were some unintended consequences that you experienced. Can you talk a little bit about that and what you learned through the process? Yeah. Well, I became a consultant after leaving Sims and mostly to family businesses. And what I would advise family businesses all the time is that going public is an exit strategy. It should not be your strategy for raising funds. And interestingly enough, because being public is so difficult, there are 50 % fewer companies on the exchange today than way back when Sims went public.

23:12It's quite amazing. One of the things that I learned during the time of Sorbanes-Oxley, which is one of the times when there was need for more legislation for regulation of Wall Street. And I remember meeting at the SEC, campaigning for this idea that one size does not fit all. We were a small cap company and we had to have the same regulations and have the same requirements for reporting as a 500 million dollar or five billion dollar company. and it was destructive and it continues to be. Although the head of the SEC at the time assured us that this was something they're working on, it has never been successfully addressed.

24:09And that's to the detriment of the public markets. It's to the detriment of investors because what we have today in response to that are more and more companies that are in what is kind of an unregulated private equity, unregulated ways in which to raise funds. The public market is the best way in a capitalist system for, you know, Joe on the street to become part of the success story. And that's not very healthy right now. So we were really through the 80s and the 90s, we were really seeing that start. You know, you're starting hedge funds started in the 90s, And then we have private equity also.

24:58And today, that's a very, very strong part of the market. It's probably a third of capital raising. I mean, and this is, we have a banking system that's regulated. We have a stock exchange that's regulated, but we don't have these other areas of capital creation that are regulated. And that means that the rest of society can't take part in it as well.

25:27Kara Goldin:Yeah, so, so interesting. So you ended up leaving the company. Can you talk about that story? Sure. At the point that we realized so much of the market was changing, there was really a loss of market share. We had lost a lot of market share in the women's market. This was, you know, if you remember companies like Benetton and the Limited, companies that came on the scene, they were very strictly vertical. They were retail companies that were fast fashion. So they would have maybe turning over their inventory eight times a year with different looks. Well, our traditional designer connection type of buying really couldn't compete with that.

26:22And we also couldn't compete with the kinds of prices that they were able to create being vertical, that they, you know, they were making decisions about the cost of fabric and where it was manufactured, whether it was going to be Sri Lanka or Vietnam or whatever. So the loss of market share and still being public really intensified our search for how we were going to maintain market share and how we were going to grow. And we made this overture to Filene's Basement. Filene's Basement was known more in the women's area, the place where we felt we were losing market share the fastest. and we made a merger and we it was a very successful purchase um but it was not a successful integration of the cultures and um what i didn't know then and i do know now through hard knocks is that very few mergers actually are successful on that score culturally and with it with a store because you're dealing with the public, having that dissonance in culture, number one, is not good.

27:45And number two, with the buying, it also made it difficult for us to be consistent with our messaging in the market, in the clothing market. And unfortunately, at the end of the day, it also wasn't really very well vetted because there were surprises that happened that shouldn't have happened. And it just stunk. So at a certain point, we had a meeting with the board that this was happening. And I believe that we needed to hire some bankers to look at alternatives, strategic alternatives. And actually, we had to close the retail stores. and the last retail store closed in December of 2012, what I needed to do during that time, besides keeping everyone together, was to figure out what was most important to me.

28:48And what was most important to me was that all of the coworkers who were loyal to us, many of whom had worked for Sims for 30 years or more, some, got their pensions, Those who wanted to find work found work and were helped in finding work. And so what wasn't really looked at was I did not keep any of the reformatted company that stayed a public company as a real estate company because we bought the real estate that we had stores in. And so we had enough value in those stores for it to remain a public company. albeit it was the hedge funds that became the owners of that company. But being on the public exchanges, it allowed SIMS customers to still get value out of their shares.

29:48And so getting the pensions, having stakeholders getting values out of their shares, getting 100 cents on the dollar through a reorganization to all of those that we did business with, those were the values that I entered this very dark period uh with I mean I'm I mean and part of writing the book was also celebrating all the good that was done you know yeah definitely well

30:17Kara Goldin:and uh everything that you just described just now what is leading with respect I think especially looking at the people that got you to where everything about the experience, right? And I think so many do not actually view the team and the culture and all of the things that you're talking about as things that you need to respect, right? It's part of life. And I think that everything about your book, Leading with Respect, just it's so good and so solid. And I loved hearing the story behind it. I think I'd heard of your father many years ago. But when I heard the story and, of course, heard that you were the daughter and all of the great that you had done, I mean, it's just so, so inspiring.

31:20Kara Goldin:So thank you so much, Marcy. And everyone needs to pick up a copy of Leading with Respect. So interesting. And thank you so much for coming on. And thank you, everyone, for listening. Thank you. It's been fun. Very, very fun. Thank you, Marcy. Thanks again for listening to The Kara Golden Show. If you would, please give us a review and feel free to share this podcast with others who would benefit. And of course, feel free to subscribe so you don't miss a single episode of our podcast. Just a reminder that I can be found on all platforms at Kara Golden. I would love to hear from you too. So feel free to DM me.

32:01Kara Goldin:And if you want to hear more about my journey, I hope you will have a listen or pick up a copy of my Wall Street Journal bestselling book, Undaunted, where I share more about my journey, including founding and building Hint. We are here every Monday, Wednesday, and Friday. Thanks for listening and goodbye for now.