Elizabeth Schweitzer represents the future of retailing.
When the 21-year-old graduates from Wharton's undergraduate program at the University of Pennsylvania in May, she won't be following most of her classmates to investment banking or consulting. Instead, she'll be joining the executive training program at Bloomingdale's, a job that many could perceive as less financially attractive.
But her goals will be at least as lofty; someday, she wants to be CEO of Bloomingdale's parent, Federated Department Stores Inc.
"This is a time ripe for young talent to come up in the world of retailing. And I feel lucky," said the Larchmont, N.Y., native, who learned the ropes of merchandising at age 13 while working at a clothing store.
Schweitzer is part of a small but growing group at Wharton who is taking advantage of a program that aims to attract top students to retailing through a strong partnership with the industry. The University of Pennsylvania - the first Ivy League university to offer a retail concentration for undergraduates - follows similar moves by other universities and efforts from large retailers to sell the industry as a place of long-term rewards, not low pay and long hours.
Schweitzer, who took a buying internship at Bloomingdale's last summer, said she has made many contacts in the industry through the program. The board consists of industry leaders like Burton Tansky, president and CEO of Neiman Marcus Group Inc., and Roger Farah, president of Polo Ralph Lauren, who have given lectures on campus.
The retail industry has struggled during the past two decades, losing throngs of bright young people to other more highly paid industries as it cut back on management training. But it can't afford to lose out any longer. Strong competition and the rise of behemoth retail companies amid consolidation demands the new breed of leaders have more than just a passion for merchandise. They need to be adept in finance and technology.
For fall 2006, Syracuse University will be officially folding its retailing program under its school of business management; it had been in the visual and performing arts department. The University of Arizona has doubled the number of requirements in business math and accounting for a retailing major in the past two years, said Melinda Burke, director of the center. And under Alan Kane, the new dean of the School of Business & Technology at the Fashion Institute of Technology, the school will be expanding internships with retailers and strengthening its curriculum. Kane founded the retailing program at Columbia University's graduate school of business.
Meanwhile, in 2003, Polo Ralph Lauren Corp. started an executive training program to attract entry-level talent, while J.C. Penney Co. Inc. just hired a human resource executive charged with recruiting on college campuses.
"We didn't do a good enough job as leaders to show that there was a terrific future, that you can run your own business," at an early age, said Jay Baker, former president of Kohl's Corp., who donated $10-million to start the Wharton initiative three years ago. "There's this huge need for talent. . . When I started out in retailing, you had to be a good merchant." Now, he said, you also have to be a "good businessman."
Because of consolidation, the average buyer buys $25-million worth of goods, compared with $5-million 15 years ago, said Craig Rowley, vice president of the retail division of Hay Group, a global consulting practice.
"Young people are starting to see a renewal of opportunity in the retailing industry," said Bob Kerson, chairman of Kerson Partners Ltd., an executive search firm in Greenwich, Conn., who is a board member of the Wharton program.
Michael Gould, chairman and CEO of Bloomingdale's, noted that the young people the company is hiring from various universities are of "increasingly higher quality."
At Wharton, 80 undergraduates and MBA students took full-time or internship programs in retailing during the 2004-05 school year, up from 27 in the prior year, said Bill Cody, managing director of the retailing program. Cody said more than 20 retailers actively recruit on campus, compared with less than five a few years ago.
All Wharton undergraduates receive a bachelor's of science degree in economics and can concentrate in such areas as marketing and, starting with the graduating class of 2006, retailing. The concentration requires taking at least four courses in core retailing skills such as Principles of Retailing along with relevant electives like courses on urban studies or real estate.
Still, bigger starting salaries from investment banking and consulting firms are very tempting. Wharton undergraduates are paid $36,000 to $46,000 for an entry-level retail management trainee job; consulting jobs pay about $60,000. Investment banking jobs pay $50,000 to $60,000, and with bonuses, compensation could be $100,000 in the first year, Cody said.
And even if retailers do nab students, the challenge is retaining them, though merchants are getting better at promoting the stars more quickly.
But Ray Oliver, 24, a marketing graduate at East Tennessee University in Johnson City, Tenn., stayed only five months at Saks Fifth Avenue after he completed the nine-month training program in May. He makes 10 percent more working in marketing at Court TV.
His big complaint was that he expected to be moved into marketing within Saks after completing his training program. Instead, he stayed in buying, an area he wasn't interested in.
"It really wasn't for me," he said.
Elizabeth Schweitzer, a senior at the Wharton School at the University of Pennsylvania, talks with Burt Tansky, chief executive of Neiman Marcus, after Tansky addressed her class. Schweitzer, 21, is part of the school's new Jay H. Baker Retailing Initiative, a program that aims to groom the future CEOs of retailers.
RETAIL EMPLOYEES LESS SATISFIED
A survey found that retail industry employees provided one of the lowest ratings of their company as a place to work compared to other industries.
Viewed career favorably
Satisfied with pay
Intent to remain for five years
The Hay Group Insight Employee Report surveyed 1.2-million employees in more than 400 organizations in a variety of key industries.
Source: Hay Group