In its second-largest acquisition, Amazon buys the company for $970 million.
Bernie Brennan isn’t looking back as he helps an e-commerce provider forge ties with fashion brands that want to go online
One might think a retail career started in the Sears of two generations ago and shaped by the poised-to-pass-into-history full-service department store model would be winding down. This is not the case for Bernard F. “Bernie” Brennan. The 68-year-old former CEO of Montgomery Ward Holding Co., Household Merchandising and Save-A-Stop Inc., and former National Retail Federation chairman, is putting his decades of experience and personal financial resources to work in a new venue: the Internet.
Brennan has deep roots in traditional retail. Today, however, he looks back for only one reason: to import what’s relevant from that accumulated knowledge to e-commerce. And he’s doing so as chairman of, advisor to and investor in e-commerce platform vendor eFashionSolutions LLC.
“Retail has always been exciting to me,” says Brennan, who became chairman of eFashionSolutions a year ago after consulting for the company and acquiring a major stake. “Now, the way you can impact e-commerce, and have a material impact immediately, is unique.”
Investing in software
EFashionSolutions is Brennan’s first venture into e-commerce, but he’s not a stranger to newer technology supporting retail business. Since departing Montgomery Ward in 1996 after an 11-year run during a tumultuous period in the retailer’s decline, he has spent the intervening years as an investor in and director at a number of software companies focused on price optimization.
His store operations and merchandising experience translated into a ready understanding of that then-emerging variety of software: basically, it did on an automated, data-driven basis what merchandisers had long done manually in stores. MarketMax, which later merged into SAS Institute, was one of the early developers of software for merchandise planning and in-season merchandise management. As its managing director, Brennan helped oversee its gradual migration into the arena of price optimization. Another company with which Brennan was associated as director and investor, Spotlight Solutions, also was a pioneer in price optimization software.
“Price optimization is basically an algorithm-based methodology that says, if you have this amount of product and you plan to be out of it on this date, then your sell-through should be this amount every week. It monitors consumer behavior and tells you what their response is so you can adjust your prices. And it’s as effective on the Internet as it is in a retail store,” Brennan says.
A key role for Brennan at eFashionSolutions, the online power behind luxury and urban brands ranging from Oscar de la Renta to Baby Phat, is reinforcing that kind of data-driven rigor in the merchandise planning that eFashionSolutions supports for the 25 fashion brands on its platform. For example, eFashionSolutions’ proprietary content management system includes template-based style guides that allow brand managers to swap out products and images online based on what’s selling or not selling. Brennan is now working with CEO and co-founder Edward P. Foy Jr. to build algorithm-based business rule technology that will execute changes to a brand’s site based on customer response: for instance, if a product is selling at a specific rate, it will be moved to a landing page.
Brennan’s long experience in the hard metrics of merchandise planning and pricing is a complement to the 36-year-old Foy’s experience in fashion and technology, but retail is common ground. Foy started his career in Macy’s executive training program and later joined Calvin Klein Jeanswear’s wholesale business, where he worked in management information systems. A company he founded in 1998, CyberRetail.com, gave him early exposure to the world of e-commerce.
“We share the same vision from a merchandising point of view,” Foy says. “Buyers do certain things based on what information is telling them to do. We both feel we are at a point where technology can automate much of that process and put a lot more intelligence around presentation online.”
While it may seem a long jump from store-based retail to technology-driven online commerce, Brennan doesn’t see it that way. From his early days at Sears and his knowledge of its catalog business, he already understood that people are willing to buy remotely, under the right circumstances. “Because I realized how much business could be done in a catalog, I was comfortable that once technology and customer service issues were sorted out, consumers would really react to e-commerce,” he says.
Still, the world of virtual merchandising wasn’t even on the horizon when the Chicago high-schooler took his first job at Sears. And it’s even farther from the Brennan family’s long history in store retail. Brennan’s grandfather, father and four of his brothers worked for Sears. Brother Edward A. Brennan went on to become chairman and CEO of Sears, a job he held for nine years until his retirement in 1995.
“It was all anybody talked about around the house, and it was what I became interested in,” Brennan says.
After earning a degree in business from The University of St. Thomas in Minnesota, Brennan started his professional career in Sears’ Minneapolis executive training program, later moving into merchandising positions and eventually serving as director of management development for Sears in Chicago.
Brennan left Sears for the wholesale side of the business to become CEO of Sav-A-Stop, a vendor of non-food products to supermarkets and convenience stores. After participating in the sale of that company to Sara Lee Corp. in the early 1980s, Brennan served as executive vice president at Montgomery Ward until he was recruited to be CEO of Household Merchandising, a large, diversified retailer whose companies included Vons Supermarkets and a number of furniture retailers. Brennan eventually participated in management’s leveraged buyout of Household Merchandising from parent company Household International, and in the subsequent sale of several of its units.
Brennan returned to Montgomery Ward in 1985 to become chairman and CEO of Montgomery Ward Holding Co., which included the company’s retail group as well as its direct marketing Signature Group. Brennan led management’s leveraged buyout of Ward’s retail division in 1988 in an effort to reverse the retail chain’s declining fortunes. However, the retailer ultimately declared bankruptcy in 1997, shortly after Brennan left the company.