By  on February 1, 2002

NEW YORK -- Barneys New York is literally building the foundation to become a player in cosmetics and fragrances.

Driven by top-line concerns and a hunger to convert non-selling space to selling space, Barneys is scheduled to open in late March or early April its first true beauty floor -- called The Foundation -- at its Madison Avenue flagship.

It's an extensive, and in some ways daring, makeover for what has always been an underdeveloped category for Barneys, ever since the retailer began selling cosmetics 15 years ago at its former flagship on 17th Street here. Like Bergdorf Goodman did in November 1999, Barneys will break tradition by moving cosmetics off the main floor to the lower level, where Fred's restaurant was housed until relocating to the ninth floor last November.

"This is a real opportunity for us," said Howard Socol, Barneys chairman and chief executive officer, whose agenda includes raising productivity levels through the $400 million chain. "We are more than doubling the space for cosmetics, going from 3,700 square feet to 8,000 square feet and giving it a new home and adding many new products. It's being done with taste, quality and uniqueness."

According to sources, Barneys on Madison Avenue does around $18 million to $19 million in annual cosmetics and fragrance sales, and the store expects the business to increase between 25 and 50 percent in the first year after the renovation.

While the volume isn't huge by big-city flagship standards, Barneys does score big on some individual lines. For example, on Madison Avenue, Barneys reportedly sells more Kiehl's products than any other retail door, about $3 million worth in a year, and is among the top five retail doors for Chanel, selling about $2 million worth.

"We've been held back by space constraints on Madison Avenue," added Chris Czajkowski, vice president and divisional merchandise manager of cosmetics. "The renovation enables us to pursue cosmetics growth here, and in our branch stores, too. But our customers expect Barneys to have the assortments already edited for her."

He predicted that based on the growth on Madison Avenue, Barneys branches, particularly the Beverly Hills and Chicago units, would be able to expand assortments within the year, even without floor expansions. Barneys also has branches in Manhasset, Long Island; Chestnut Hill, Mass., Seattle, and a unit in the World Financial Center, which remains closed since Sept. 11.

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