Impact & Insight: Luxury Retail Expert, CEO & Entrepreneur Robert Sakowitz

Before Houston became a global hub for business and culture, there were leaders quietly shaping what excellence looked like while also setting standards others would follow.

One of those leaders was Robert Sakowitz.

As a driving force behind the iconic luxury department store Sakowitz, he helped redefine retail in Texas—bringing a level of sophistication, service, and customer experience that was truly ahead of its time. But his impact goes far beyond fashion. At its core, his story is about understanding people—how to build trust, create loyalty, and turn a business into something far more meaningful within a community.

In this episode of Impact & Insight, Managing Director Jane Howze and Sakowitz discuss the swiftly changing luxury retail landscape, what modern branding really is and the last item Sakowitz purchased in a brick-and-mortar location.

Find more at www.thealexandergroup.com

Transcript

SPEAKER_00 0:06

You know, business is business is business. Hazak Corporation, H-A-Z-A-K, which is my company, basically tries to help companies get from where they are to where they want to be. I love learning about industries and helping them.

SPEAKER_02 0:23

Welcome to Impact and Insight. I'm Jane Howes. Today my guest is Robert Sakowitz, a name synonymous with Houston's retail industry. As part of the family behind the legendary Sakowitz department stores, Robert grew up in a world where retail was much more about than about transactions and selling merchandise. It was about relationships, service, and creating unforgettable customer experiences. In his book, More Than a Store, Robert shares memories of that remarkable era and the lessons it still holds today for entrepreneurs and leaders. Robert, welcome to Impact and Insight. I'm delighted to have you here.

SPEAKER_00 1:11

It's a pleasure to be here and thank you for inviting me. I really appreciate it, Jane.

SPEAKER_02 1:16

Oh, excellent. Well, you know, Robert, in your book, one of the things you talk about is that in the past, cities had stores that were synonymous with them. Dallas, Neiman's, iMagnan in California. And of course, Sakowitz was, you couldn't talk of Sakowitz without talking about Houston. And do you think cities still have those kind of relationships with stores today?

SPEAKER_00 1:45

No. Real quick answer, no. And let me uh the first chapter that you're referring to is called Cities and Their Stores, because um cities basically uh well, we go back to how the consumer actually gets their goods or how customers, not consumers, individual customers, uh, which is what people looked at in those days, um, would acquire merchandise. Uh remember that retail uh is is actually not an industry, it's a system of distribution from the original design to production to the final step, um, which is the one-on-one sale, used to be through the individual, and today, all too often, through technology and through uh uh the web. But basically, therein lies the difference of geography and personal interaction. So retail, um, actually the the French word uh is better for it. The the the French word of uh wholesale is en gros, which means by the gross. So wholesale, you sell it by the gross, it's a certain price. But retail doesn't mean anything in and of itself, but the French word is en détail, D-E-T-A-I-L. You're selling it by the detail, one by one. Therefore, there's a mark on for that service in between. That spread, which today is called a supply chain, basically from design to manufacturing to uh delivery to an uh a middleman or to the end uh uh, shall we say, distributor, because it's a distribution process, um manufacturers would give uh outlets, meaning a store, in each city the opportunity to the request and the opportunity to distribute their merchandise. To distribute that merchandise, frequently the store would say, I'd like an exclusivity. So let me have your product and I will promote it, I will get behind it, I will show it, I'll educate my people about it, because what's important back then was to educate about the product. I used to say that we have retail as department fashion specialty stores, um, had the obligation uh they had the obligation and they had the um opportunity to do the four E's. And the four E's were to edit on behalf of your client in that city, uh to educate, to let them know why it's worth what it's worth, the quality of what it is, um, to um to entertain by also creating excitement about it, because the uh the three E's beforehand equal excitement. And not just that today, the only excitement people get is when they get a little package that they've ordered and they feel like they're getting a present from themselves at home when it's delivered. That's the only excitement. There's no real feeling of excitement as you go into a store. Each of the cities had different personalities and still to some degree do, needless to say. And I'll get to that in a moment between Dallas and Houston, which was a huge difference. But that made for um there were there were what I called actually uh uh the uh New York Times quoted me in a in a speech that I had made for the National Retail Merchants Association some years ago, in what I called geographical determinism, because the geography would determine the timing, the color, the fabric, all of those weights of fabrics because of the nature of weather and the timing. I remember at one point, and there's a chapter in the book about trying to put together a confederation of stores. That confederation of stores um did not go through because, and fortunately, I learned an awful lot uh by doing this, because for instance, when I was trying to work out putting together um Jacobson's uh specialty stores in in Michigan um and Sackwitz, I went up in February and it was so cold, and the only colors in their stocks were black, navy, winter white, and red. And we already had pinks and yellows and you know, salmon colors and all these spring colors and lighter weights. And I said, no, the economies of scale of joint buying that I thought were going to be affected by this, the timing's way off. It's not gonna work. It ended up helping me to determine that we would go for Sakowitz, we would go only as far east as Atlanta, as far north, maybe as Kansas City, and as far west as Phoenix, Arizona, where we did go. Because within that, yeah, I could work on that.

SPEAKER_02 7:31

So I've got to jump in and ask while I'm thinking about it. Tell me the difference between a Neiman's customer back then and a Sakowitz customer.

SPEAKER_00 7:42

Uh-huh. The difference between Dallas and Houston. Yes.

SPEAKER_02 7:47

Well, what was what is the difference?

SPEAKER_00 7:49

Dallas, remember, Dallas was built just like Chicago, Kansas City, St. Louis, Dallas by the railroads. It was the jump-off point going east to west. And so it had lots of people who moved there and built up the population all around Dallas. So you draw a circle around Dallas and you get millions of people. You draw a circle around Houston, you get millions of fish in the Gulf of Mexico. So it was built by this East-West, and at any time, a Dallas customer and a store, obviously for those customers, would be having one eye to the East Coast and the other eye to the West Coast. So they'd look at New York and they'd look at San Francisco. And so the way I used to teach our staff the difference of how to sell something in Dallas versus Houston is the Dallas customer is a marketing, uh social uh finance. Dallas is marketing, it's insurance, it was finance, and it was distribution. That's what it was built on. Houston was production, it's the value of the quality of make. So it's a totally different kind of make uh uh of sale, of thinking. Dallas is marketing promotion minded. The Duchess De Kilka shows. In Houston, it's who made it, what's the value, what's the intrinsic cost of making it, how does this, how does this work? Totally different ways to think. So production-oriented city.

SPEAKER_02 9:32

How interesting, how interesting. I hadn't thought about it that way, but that makes perfect sense. And Robert, um, I told some several of our clients that I was talking to you today. And the one question, and you know this is coming, is well, ask him what he thinks about the Neimans and Sachs, and you know, can they survive? Of course.

SPEAKER_00 9:54

I've been I've been asked that. Yes.

SPEAKER_02 9:57

I I know you get asked it a million times, but what were the mistakes and and how do you see it going forward?

SPEAKER_00 10:04

The mistakes, um, first of all, Neiman Marcus and Sachs both um went public years ago. Most people don't know that Neiman Marcus went public um in 19 uh 59 and was taken private and taken public again, take it private. The the Wall Street game. And what has caused this is the same thing that caused the problem with um Foley's and a lot of the stores, Allied and Federated Department store chains in the late 18 uh 1980s, when everything went to hell, not only in Texas in the mid-80s, which caused our problems, began to cause them, but also the flash crash on Wall Street in the late 80s. And a man by the name of Campo, who's a Canadian, had taken over Allied and taken over Federated, and it went under. They laid too much debt on the company. Retail stores are not made for what real estate, quote unquote, can take because the retail stores constantly need to refurbish. It's a new inventory every year. It's actually a fairly high-risk game because you're in the fashion industry to some degree and in varying degrees with different stores. But um Neiman's uh the acquisition of Neiman's by Mr. Baker, who had acquired Hudson's Bay, then acquired Sachs Fifth Avenue, and Sachs was having some problems. He made a deal with Amazon, and Amazon invested $400 million into uh this acquisition uh in order to be able to have Sachs online on Amazon, but it didn't work. They l they loaded up the company with way too much debt, which with any little bit of dip in consumption, and remember the American economy is between 60 and 70 percent consumer-oriented, and if it begins to drop off, that begins a question. Niemans and Sachs, the new emerging company that will come out of a chapter 11, um will be a lot trimmer. It's gonna close 35% of their stores. Uh, believe it or not, uh uh they're gonna close off the Amazon thing. They're closing the off-fifth operation. Neiman's is closing its last call operation because both of those became stores and entities in themselves. They had to buy for it specially, totally different operations. Those are gone. They're gonna try and go back to what they were good at, which is fine, luxury, upscale specialty stores. So Neiman's is closing a number. Sachs is closing more because Sachs had overextended itself even more so. But the acquisition of Neiman Marcus with all of the debt that he piled onto it was a bridge too far, and it just made no sense. Um people ask, well, are they going bankrupt, meaning out of business? No, basically, ever since uh the last several decades, uh many operations have filed for protection under Chapter 11. That's what the Bankruptcy Act is. Chapter 11, it helps you reorganize and swim down and get rid of some bad leases that aren't working, get rid of some debt. Uh, it hurts the person who's owed the money and is going to lose it. Amazon will certainly lose its 400 million, but people like uh one of the top creditors um is uh with with uh with Niemanson Sachs is Chanel. And I mean it's over $100 million. They're not gonna lose all that $100 million because they work together too well, they will continue to work together. So um the the final word, I guess, that I can say to your to answer your question is that yes, there's no question but that they will survive, but they will survive more like they used to be, as opposed to this huge extension. And they will put more 35% of their businesses already online, but also 35% of it is something I started in the 70s, which is private label. 35% of their merchandise in Neiman Marcus and in Saks Fifth Avenue are their own private labels. That gives them a higher gross margin markup so that they can afford that first one-third markdown and distribute, you know, get rid of the goods and still make money.

SPEAKER_02 15:07

Well, you've raised kind of an interesting segue for me because the retail CEO of today, how did what does one have to be to be a CEO of a retailer today? And how does it differ from uh 25 years ago?

SPEAKER_00 15:29

25 years ago, um, and 25 years ago is only the late 90s. So I'm gonna go back to more 80s rather than the 90s because it really began to change with online and the changes in on the web in the mid-90s. So earlier they could look to their customers, the the a retailer looked to its community. Um it was more concerned with um educating its public with uh how to control its cost and um properly distribute, promote and distribute its merchandise and select the right merchandise for their area. Um today, depending upon the company, if it's national, it has to look in terms of speed, of more technology. Uh and and unfortunately, uh most of them are public and therefore live or die on a quarter-to-quarter basis. They literally are constantly reporting. The the uh uh recommendation uh by the government, uh I think it was by uh President Trump, um to uh stop the quarterly reporting and make it every six months is I think uh would be a smart thing, you know, because basically you're forcing the CEO to think short-term, not long-term. And to his, you know, he lives or dies just on that. That is not the way you look at your customers. That's not the way you work with your with your vendors, with your resources. Also, today, whether we like it or not, we have a global, we are dependent upon a global supply chain. And 90% of everything that we consume is moved up by water. And so you're talking about right now with freight and maritime challenges, you're talking about a uh a global supply chain now that we have forfeited our own manufacturing within our country and close distribution. So there's a myriad of other things that complicate a CEO's uh role, his his daily life, um, in acquiring, holding, presenting, and then after sale of the entire chain.

SPEAKER_02 18:11

But you know what? I'm not hearing that you that you did so well and is the creativity of how do I delight my customers, and maybe we find maybe we go abroad and introduce them to something new they haven't had. And you, you know, a lot of the things you've talked about are more analytical tools than the creativity that you were so well known for.

SPEAKER_00 18:43

Thank you, thank you. I appreciate that. That is that kind of innovation is what separated us and other stores. Um, and that was partially caused by need because Neiman's had the exclusives on women's. We started in the men's business, Neiman's started in the women's business, and even when they came to Houston, they acquired a company called The Fashion that had the same women's exclusivities as they had in Dallas, Neiman's had. So it locked us out. So I literally had to look other places for the creativity in order to try and come up with some sort of competition. So that plus uh finding things over there that I thought were very interesting at the time. The world was uh was was so much in many ways smaller because you were here and you could go over here, or your country was. Today, everything is fast and it's accessible. And yes, people are still trying to create new things, but the problem is that the attention span, as you mentioned before, um, is so short. And unfortunately, people are looking for immediate uh gratification, and then they go on to the next thing, and then the next thing, and then the next thing. So the problem is there are innovations, but they're not lasting innovations, they're not meaningful innovations, and um the speed of movement says, what was that that came and went? You know, it it just you know, oh yeah, somebody invented that or somebody thought about that. So um when I was introducing things, it was because the world was different and I could find things in Asia or find things. I mean, when I first went to India, it was the 70s and Hong Kong. And I was literally, uh, as the one of the chapters outlines, uh, going to China eight months after a year after Nixon and Kissinger were there. I was one of the first Americans there to buy some of these incredible Asian art pieces for our gift department, but also to have products manufactured, which I negotiated uh back then. That was all new.

SPEAKER_02 21:13

Well, I'm curious, what was the designer that, as you look back, that had perhaps the biggest impact on Sakowitz, or was the most thrilling to you to discover and introduce?

SPEAKER_00 21:30

Unquestionably, Yves Sainurand. Yves Saint Laurent was the last word for over a decade, which is unbelievable. Uh, it even got to the point where he would be the last show in Paris of all the collections because he would put the imprimatur on any kind of a look. If if he didn't have it in that show, it wasn't it wasn't gonna be. And Women's Wear Daily would do that, and and we Launched the first Salarin Reve-Gauche boutiques and systems in store that today you know is totally different. But um he was really uh an incredible, it's overused, but genius, in the way in which he could uh, as the old movie What Women Want, he could determine uh or or create something that someone would not have thought of before that you know, you don't know what you need until you see it, so to speak. And he would create something, and someone would say, you know, a lady would say, That's really and I would see it on the runway, and I'd yep, that's new. And it would be the drivers of fashion. It wasn't by coincidence that uh the New York fashion shows were literally two weeks after uh a week after uh Europe collections had slowed down. First was Milan, then Paris, then London. Then I'd come back home for a week, and then I'd go to New York for the fashion. Well, during that week, they were all scurrying to modify their version of Yves Saint Laran. Um, so there was not much question on that. That's that's a a that's probably the largest, uh, longest chapter uh in my book, uh entitled And Then One Day It Went Away, because literally at one collection, and I outline it in the book, uh, I saw it's no longer there. He was just exhausted. And it it it takes a lot out of you being number one, number one, number one year after year.

SPEAKER_02 23:46

And what did you do when you you noticed he was exhausted?

SPEAKER_00 23:52

Um we had such an investment in it, we continued, but uh we expected less uh of it, and we wouldn't continue to buy that much more, more, more every year. We began to uh let's let's just say control the the the growth of what we were investing in within.

SPEAKER_02 24:16

Yeah, no, that makes sense. Well another question I had was Is there a good career for people going into retail today? And if you were advising them, what would you tell them they should do to advance? And is it a good is it a good career as it was where the creativity was so encouraged?

SPEAKER_00 24:40

Um I would just say that the uh yes, it's still an interesting career. It's much more technical, uh, it's much more diverse. Uh it's so much faster. You almost don't have time to think. But you also have to do don't have to do that much uh risk taking because hell you have AI to look at, and you know what are the what are the probabilities of it working? You know, I mean what whatever, you know. Um it's just a different world. So it's a uh it's not the creative uh outlet that it was. Um it's a execution model. And you so you have you, yes, it would be better if you had a sense of uh design and taste and all of all of that, but um let me give you uh one piece that I think might help answer that. Today you will hear people talking about branding. Um to me, there is no such word as branding. A brand is a noun, it's not a verb. A brand is something that is earned through um uh uh reliability, reputation over the years of being consistent, quality. It is what it is and always is, and you can depend upon it, and it has real value. There's marketing, there's logos, those are tools, but branding is not something you just decide to go out and uh verbalize. You can try and do that today through the media, because media has so much, and more importantly, almost unfortunately, social media um can make or break. I mean, it's like uh culture uh canceling, you know. They sometimes they don't even know what they're talking about, but they don't like something. So there are so many influences that are not appropriate influences, not knowledge uh-based influences, not intelligent, but they're out there to make themselves a personality. Uh the one person I would look to for a phrase that has become universal is Andy Warhol's, when he said, in the future, everyone's gonna have 15 minutes of fame. That's it.

SPEAKER_02 27:27

That's it.

SPEAKER_00 27:28

15 minutes, and that has is happening.

SPEAKER_02 27:31

And and so following on that, what is a retail brand that has impressed you in the last five years?

SPEAKER_01 27:42

Wow.

SPEAKER_00 27:45

Um well let me let me say that a name that has continued to operate extremely well is uh LVMH, Louis Vuitton, yeah, Loi Hennessy, as a company. They have done a brilliant job and done extremely well. Uh an individual name, I have not been asked that.

SPEAKER_02 28:10

Well, you gave me a great name because I I I was thinking of that myself.

SPEAKER_00 28:14

Um as an as an individual item, uh I think Lululemon has done a really nice job in its space of uh athletica kind of things.

SPEAKER_02 28:28

And I know how they're they're expanding to pickleball as pickleball, and that they've come they've come around from that. Well, you know, one thing that I'd like you to talk about is you're a in-demand consultant now with a lot of retail businesses, consumer businesses.

SPEAKER_00 28:50

Um, tell me actually, actually, go ahead. I'm sorry.

SPEAKER_02 28:53

Yeah, I was just gonna curious. Um, tell me how you segued into that and your reach is broader than just retail. And can you talk a little bit about that transition for you?

SPEAKER_00 29:06

Sure. During the course, well, first of all, um let me say that it was it goes back to the question of so many people. Well, you know, what was your favorite department in your stores? Yes, and I said, uh, do you have children? Yes, of course I do. Well, it's kind of like which was your favorite child? Yeah, but I literally, having started in the stores marking shirts at the age of nine, I worked in every department. And so all of the things, the shoe industry was different than the shirt making industry was than the women's fashion and the men's and gift departments, all of those were extremely different disciplines. And if you have, which back to your question about giving some uh suggestions to those in the industry, unless you have an intellectual curiosity, don't do it. But an intellectual curiosity, it just I had was born with that, and just wanted to know all the time. Well, you are dealing with distribution manufacturing finance. So I ended up on the board of more shoe company, a shoe manufacturing firm, three different bank boards. Uh, the Federal Reserve, I was Houston branch of the Dallas Fed chairman for the 80 terrible three-year period of 82, three to 85. Um, I was on Continental Airlines Board of Directors. Um hence, uh years hence, uh, from um retail in my consulting, I've been on different boards that are technology, other things. So um I had some background in doing it, but that didn't prevent, as you'll read in the last chapter, me from saying when the stores were closed, when my two and a half billion dollar partner from Australia went under and took Bonwitteller and B. Altman and Sackwitz and everyone with him. Um I didn't know what I was going to do. I'd lost 90% of my net worth. I had to start all over again completely. I had no idea what I was gonna do. And I got a phone call uh from Canada, and a fellow said, you know, we've got some problems. You've been through this. Maybe you can help us. You've been on uh on bank boards. Um I said, is it a turnaround? He said, No, we think it's too far gone. We want you to um help us get off of our personal guarantees with the banks and stop the family from killing each other because it's terrible. Um, so I called this friend of mine, uh, Bob Oth was then Arthur Anderson. I said, I know what consulting is, but how do you charge for the stuff? And he told me what the process was and all the rest of it. And so I did. I was successful in that. Then the next was IKEA, then the next was Saxfifth Avenue, then for five years Highland Village, then uh uh it segued from that to turnarounds with assisted care, living, and nursing home operations to oil and gas, to uh strategy with energy companies, with technology, uh, a coffee business. I had been in the wine business, uh, launching fine and rare wines at the Sockwood stores. So the wine, so uh it then became more technology-oriented, more other companies. Can you help me with this? Can you? I mean, you know, glass, a glass manufacturing company, just very, very diverse things. But there are some similarities, you know, business is business is business. There are similarities that you can look for in helping companies. And Hazak Corporation, H-A-Z-A-K, which is my company, basically um tries to help companies get from where they are to where they want to be, and what's the problem of getting there, and how do we do that, and all of those things. So I help, I've helped um restaurant companies, food service, I mean, lots of different industries. And it's because whenever I see one and then they give me what the challenge is, that word just gets me. The challenge. I I uh I love learning about industries and helping them.

SPEAKER_02 33:28

You know, I think that is the hallmark of a good consultant is the challenge and also the intellectual curiosity that not not every um what's the saying? You don't need a and not everything needs to look like a hammer because not everything is is a nail. Right, right, right. I I'm not saying it right.

SPEAKER_01 33:51

No, no, no, it's yeah.

SPEAKER_02 33:52

Um, so one my final question to you is is um I haven't stumped you yet, but tell me the last thing you went to a retail store and bought. I'm so curious.

SPEAKER_00 34:06

Who man? Uh a retail store, because it's usually for gifts, you know, a wedding gift or a Christmas gift or a birthday gift. Um the last thing I went to a store and bought uh is uh were gifts for my grandchildren. So, you know, they'll see something that they wanted, and if it wasn't on Amazon, I go to the store and get it. Um but you know, it's like people say, Well, where do you buy your clothes? And I say, you know, from my closet.

SPEAKER_02 34:41

Well, I would imagine that you will never get through your closet, probably with with the suits and and ties that you were so well known for, right?

SPEAKER_00 34:53

I um have enough of an assortment, shall we say? Well, but I I still I still love walking through stores, I still enjoy uh and not just uh um uh the uh finding different things uh in stores and what they're doing, but just uh to see the differences and uh hopefully get it.

SPEAKER_02 35:20

Well, your intellectual curiosity never it's a gift that uh never goes away. Well, Robert, this has been so wonderful, and I we are going to we think the book is a wonderful book. We uh I'm hoping that everyone will go.

SPEAKER_00 35:39

It's at if you don't mind my saying, it's at Cool Linscombe. Yes, and at uh at Razus Bookstore and at the Houstonian uh uh shop. Uh I don't have it on Amazon or Apple yet, but I'll I'll get it on there. And and also it'll be available through my own website, huzak.com.

SPEAKER_02 35:58

Excellent.

SPEAKER_00 35:59

H-A-Z-A-K.

SPEAKER_02 36:00

Excellent. Well, Robert, thank you so much. It's been such a pleasure to have you with us today.

SPEAKER_00 36:06

You're a wonderful person to talk to. Thank you. It's delightful.