The “Merchant Prince” Would Like A Few Words

On the eve of his 80^th birthday, the one-time CEO of Gap Inc. and J. Crew is still in start-up mode. Mickey Drexler talks (and talks) about khakis, discounting, and pissing off his friend Steve Jobs.

Gen Z likes to throw around the word iconic to describe everything from a seven-episode Netflix series to an Erewhon smoothie. But Mickey Drexler has earned the title. As the CEO of Gap Inc. in the 90s, he was credited with changing the way Americans dressed at the office. He also rescued Ann Taylor, launched Old Navy (which he named after a bar in Paris), and ran J. Crew when Michelle Obama wore the brand to her husband’s second inauguration.

Drexler has been called the “Merchant Prince” but he doesn’t like using the word product when talking about fashion. Perhaps because clothing has always been an emotional experience for him. Drexler grew up in a one-bedroom apartment in the Bronx where he slept on a cot in the foyer. His father could be casually cruel and his mother was often sick. Mickey mostly hung out with his aunts and dreamed about making moves.

He pulled it off—and some. Drexler took Gap from a $400 million dollar business to $15 billion. He convinced Steve Jobs to join the company’s board and somehow made swinging dancing cool (remember that Gap commercial?). Drexler was fired in 2002 after a slowdown in sales. But he famously refused to sign his severance package, in part to avoid the non-compete clause.

Drexler, a true serial entrepreneur, went right back to work. In 2003, he invested $10 million dollars in J. Crew (for a ten-percent stake of the company) and assumed the CEO’s chair. He smartly let designer Jenna Lyons do her thing. He also launched Madewell (he owned the name) and became famous for using the office intercom like a megaphone. Perhaps that’s why Lyons didn’t tell him the First Lady would be wearing J. Crew to the inauguration until the day before. Apparently she didn’t think he could keep the secret.

On the eve of his 80^th birthday, Drexler’s still talking. And he’s in start-up mode all over again, as cofounder of the brand Alex Mill alongside his son, Alex Drexler, and designer Somsack Sikhounmuong. Alex Mill trades in elevated basics for men and women—almost an antidote to trend-driven streetwear. (They also make the striped shirt co-host Mickey Rapkin wears in this video, which he rarely takes off.) For the season 2 finale of our Forbes series “Cereal Entrepreneur,” Drexler pours a bowl of Cheerios and doesn’t hold back: “At this point I can say whatever.”

MICKEY RAPKIN: You grew up in the Bronx in this one-bedroom apartment. I’m wondering if that’s where your entrepreneurial spirit started. Were you already dreaming, I’m going to get out of here?

MICKEY DREXLER: Well, it’s interesting. Entrepreneurial spirit… There’s classes on that now. I don’t know what you would teach because it’s so inside the DNA of a person. But I used to fantasize that my father was successful so I wouldn’t have to worry. But unfortunately, I didn’t grow up like that. My father was not a nice person. He was never proud of what I did. And he was living while I was in the middle of Gap.

ERIC RYAN: My dad was basically Ward Cleaver.

DREXLER: My dad once said to me— I told him, “There’s a really nice article [about me].” It was Vogue magazine. He goes, “You’ve seen one, you’ve seen them all.” That’s a big tell, right?

RAPKIN: I’m sorry about that.

DREXLER: In hindsight, it created a hunger—and a need in me—to break out of this kind of thing. I lived in my imagination because I was always escaping my reality.

RAPKIN: You dress in a uniform. When did the uniform start? A lot of highly successful people dress in a uniform.

DREXLER: And unsuccessful, too! It wasn’t a planned strategy. I had a uniform in grade school. As I grew, I never thought about it, but keep it simple. I didn’t want to be the guy, Oh, there’s the guy with the orange shirt. In the department [stores], I wore a suit. Then when I went to Ann Taylor, I didn’t wear a suit because I was the boss. You want to be a real person. The suit is, to me, armor. At Gap, when I came better known, I wore this same uniform. Shirt out, jeans. I don’t like khakis because they make men my age look older.

RAPKIN: That’s so funny. You’re credited at the Gap with changing the way America dresses and making khakis cool.

DREXLER: Well, I never wore them. But it’s a vision. A guy can’t look bad in a pair of khakis that fit right and in a button-down woven shirt. But depends on how you wear it.

RYAN: That’s so interesting. My uniform is bright, optimistic colors. It reinforces that I’m approachable. I dress to invite people in.

The Steve Jobs Report

RAPKIN: There’s a famous story about you and Steve Jobs. But I’ve only heard the first half. You’re this genius of retail—

RYAN: You really are. Your ability to sniff a trend at the earliest stage before another major retailer sees it is so impressive.

RAPKIN: Steve Jobs takes you to the prototype of the first Apple Store—and you hate it. But I never heard the second part. What didn’t you like about the store? And what did he change?

DREXLER: Steve, he’s very smart. He’s actually the smartest guy in any room. But it wasn’t clear, it wasn’t clean. It was not a timeless design. It wasn’t like I studied architecture or anything. Anyway, I said to him, Steve— Whatever you say to Steve, he can get mad. We had a nice relationship. When he was mad at me, it was OK. If anyone’s going to be mad, I’m honored that Steve was mad at me.

RAPKIN: What would he get mad at you about?

DREXLER: Well, sometimes I ask stupid questions. I’m not a tech person and I was not smart to use a BlackBerry. I try to hide it because I really—

RAPKIN: You used a BlackBerry in front of Steve Jobs?

DREXLER: Well, it was not a good look.

RYAN: (laughing) You could say that again.

DREXLER: And I then did an iPad to make like I didn’t have a BlackBerry. But Steve— He once yelled at me, I’ll never forget this. He was talking about the Tesla. One day, he was going to do a car if he lived. And I think it would’ve been a very successful car because on a tangent, I think the car designs today, I can’t tell the difference from one to the other. So if I call an Uber, I don’t know what a Toyota Highlander looks like. Anyway, he said, “Genius car, the Tesla.” It was when they had a two-seater. It was really ugly in my opinion. And I missed his point. I said, “Steve, why? The Tesla is such an ugly car.” In Steve’s style, he says, “I’m not talking about the car-chassis-body. Anyone could design a good-looking car. I’m talking about the engine.”

Mind the Gap

RAPKIN: You’ve talked about making mistakes over the years. What lesson did you learn from being fired by Gap? Getting fired feels like a rite of passage.

RYAN: When your job is be the trend leader of a category, you have to keep pushing boundaries. It’s like skiing. If you’re not falling down, you’re not trying hard enough.

DREXLER: It was a total shock. I knew the turnaround was in. We had one bad year—of 18 years, whatever. Company’s value went from three or 400 million to seven or eight billion over that period. But I said, Something’s going on here. I feel it.

RAPKIN: I heard you didn’t take the severance package. Because you wanted to compete.

DREXLER: I got three calls. I never forget, I was walking uptown to our apartment, and I get the first call. I hung up the phone. Then a message, and at midnight, I get a call, “You are not going to sign it?” I said, “No.” I said, “You were so generous with me for 18 years and I feel very satisfied, I feel I’ve been successful, and it’s your decision.” What did I learn? It drove me further.

RAPKIN: Let’s about discounting. A lot of brands are constantly discounting. Alex Mill runs sales just twice a year, I think. Does constant discounting teach the customer the wrong thing? Are you at all tempted to do it?

DREXLER: Look, I used to discount, too. I go into shops now. I said, “What’s the deal of the day?” I shop a lot of stores. You always learn something. “Oh, well, it’s 30% off the sweaters.” I said, “It says online that it’s 40% off the entire brand.” And she was very nice. She goes, “Whoever knows, they get the forty off.” How would you feel if that happened? One thing I learned at Bloomingdale’s is, If the customer sees it on sale, you’ve got to give the same price. It’s good, it’s honest. Then if you go to T.J. Maxx— T.J. Maxx is, to me, the most successful department store. High earnings, big value.

RYAN: Yeah, we use T.J. Maxx whenever we need to offload inventory. They’re wonderful to work with.

DREXLER: Yeah, well, they kill us on the price. They negotiate. But the point is, you go to T.J. Maxx, you don’t have to be there at the right hour, at the right minute. It’s the price.

Start-Up Mode

RAPKIN: Alex Mill I think has only one retail store.

DREXLER: Two now. We’re opening a third. We’re opening a third.

RAPKIN: You seem like such a beast of retail. Do you miss being in retail?

DREXLER: Well, retail is online also. But no, I’m in the retail business. We’re ready to open up more stores. I don’t have any investors. Nor do any investors think, “Well, it’s 35, 40 million—breaking even.” They want big. Why? Because mercenaries have their investors and we don’t fit the exact performance. I thought the phone would ring off the hook. I know it’s ready to happen. If I had an investor, I’d do what a number of companies have done when someone gives them a crazy amount of money. All of a sudden, they open up ten stores, you see the billboards, they add to staff. I thought someone might want to do that or approach me.

RAPKIN: Is there some freedom in not having these VCs?

DREXLER: Hello, hello! I didn’t want boards of directors in my experience. I don’t want someone coming in—I call it the Sunday picnics with their family—on Monday [saying], “Oh, why don’t you have this?” They bring in a sample. I don’t want an investor. But I want a friendly investment family that looks long term. That would help. But not to give up control. My main mission here is to leave them with a healthy economic company.

RYAN: For entrepreneurs who can’t bootsrap, I always remind people there’s an advantage of working with VCs. You’re going through the rock-tumbling experience together to refine and polish the business.

A Man In Full

RAPKIN: Speaking of legacy, you have a big birthday coming this summer—

DREXLER: Let’s not bring that up. I don’t want to be reminded. I still feel like I’m 24 years old.

RYAN: (laughing) You are my prototype entrepreneur. I am aspiring to be you.

DREXLER: The secret, it seems, is that you stay curious. You stay curious in talking to young customers, the people you work with. That’s how you keep going. I’m a detective. The clues are everywhere if you look for them. I look at the bestsellers every day. Because that’s where you make your money. And you have to solve the case. And sometimes, you don’t do the right detective work. I made a lot of mistakes. But if you have a better batting average, you’re OK.

The conversation has been edited and condensed for clarity. Click here for last week’s episode of Cereal Entrepreneur, where Dr. Harvey Karp talks about his invention, SNOO, the $1,700 bassinet that Serena Williams, Ashton Kutcher and Beyoncé can’t stop buying.