Barneys New York is no purple dinosaur, even if it did have a brush with extinction. The luxury department store chain sells designer apparel for men, women, and children; shoes; accessories; and home furnishings. It operates more than 40 locations including 10 full-size Barneys New York flagship stores in New York City, Beverly Hills, Boston, Chicago, Dallas, and other major cities; more than 15 smaller Barneys Co-Op shops; and about a dozen outlet stores. Founded in 1923 by Barney Pressman, Barneys New York is owned by an affiliate of Istithmar PJSC, an investment firm owned by the Dubai government. After a tough couple of years for luxury retailers, Barneys has a new leader and is looking to recover.
After more than two years without a CEO to steer the firm, Barneys finally in August 2010 hired luxury retail veteran Mark Lee. Lee succeeded Howard Socol who resigned in 2008, reportedly over a disagreement with Barneys owners about plans for international expansion. (In the interim the retailer was run by a committee of seven executive vice presidents.) Lee, who previously served as CEO of Gucci Group and Yves Saint Laurent, joined Barneys as sales of luxury goods were beginning show signs of life after a prolonged period of weakness. While luxury sales have rebounding strongly in 2011, they have yet to return to pre-recessionary levels. Also, Lee must content with the heavy debt load incurred when Istithmar bought Barneys.
In 2011 Barneys pared its store base, shuttering three Co-Op shops in Houston, White Plains, New York, and Troy, Michigan. There are no plans to close any of the retailer's 10 flagship stores.
In late 2010 Lee shook up Barneys' creative team, with the departure of two fashion executives (who together had logged nearly 40 years with the business) and the appointment of another Gucci Group alum. The shakeup is seen as a signal that Lee is looking to broaden Barneys' appeal beyond the New York fashion scene by catering to more mainstream tastes. Also, in February 2011, Lee announced that Barneys' board of directors has approved the largest renovation budget for existing stores that Barneys has seen in years, as well as an overhaul of its website. In a bid to appeal to the masses, Barneys has enlisted pop diva Lady Gaga to design the famed holiday window display at its Madison Avenue store in 2011.
The decline in Barneys fortunes, brought on by the foundering economy, in the aftermath of Istithmar's 2007 purchase led to rumors that the Dubai investment firm would try and sell the company. Istithmar, which faced a huge debt deadline in December 2009, got a lifeline of sorts when the supermarket magnate Ron Burkle became a significant investor in the business through his Yucaipa Companies. In early 2010 Burkle was reported to be looking to add to his holdings by buying a controlling stake in Barneys.
Barney Pressman founded the company with money he raised from pawning his wife's engagement ring. Barneys sold exclusively men's apparel until the 1970s when it added women's wear. In late 2004 the Pressman family sold off its less than 2% remaining ownership when Barneys was sold to Jones Apparel Group for about $400 million. In 2009 Jones Apparel sold the company to Istithmar World for $945 million. – less