"We lost focus on recruiting our best kids," he said. "That was short-sighted on our part." In the 1980s, retailers stopped offering once-popular training programs for college graduates and the brightest former students went on into other profession, in the tech sector, consulting or on Wall Street.

Macy's has reinstated its training programs for potential executives, and Lundgren said he personally recruits at college campuses and encouraged other top retail leaders to do so. "You need to take a personal level of responsibility," he said.

Lundgren also acknowledged the difficult time the industry is facing due to the subprime shakeout, high energy costs and other factors. "Most everybody in this room has gone through one of the most challenging retail periods in a long time," he said.