By  on August 6, 2009

For Barneys New York, it’s been an eventful — and sometimes stormy — year so far.

Double-digit sales declines and a customer base hit hard by the recession sparked layoffs, expense cuts, jitters in the market and sharp downgrades by rating agencies. Not to mention the specialty store has been without a chief executive officer for 13 months.

But amid the turmoil, the Barneys ship is still afloat and the waters — for now, at least — appear to have calmed. Parent company Istithmar World Capital has pumped $25 million into Barneys to release vendor shipments and ease liquidity concerns; there have been merchandise initiatives with designers to lower prices and provide greater value, and while there’s no talk of new leases being signed, the domestic expansion appears on track, with a flagship opening in Chicago last April, another set for Scottsdale, Ariz., in October, and Barneys’ first warehouse sale in San Francisco currently under way.

“To us, during this period, it hasn’t felt so weird,” said Judy Collinson, executive vice president and general merchandise manager of women’s, pointing to past extended periods where Barneys has operated without a ceo. “I don’t think we are in a weak position. We are not falling apart at the seams. We are doing things we are supposed to do.”

Now Barneys is moving to further ease the financial pressure, tackling a 500-pound gorilla. On Tuesday, Perella Weinberg Partners, an asset management company, was hired to help restructure the retailer’s debt. On the books, there is about $500 million in long-term debt, including a $270 million term loan maturing in 2014 and a mezzanine loan of about $230 million maturing in mid-2016. There also is revolving credit debt, which, based on available working capital, varies from month to month and matures in 2012. The balance is currently $80 million. Barneys’ lead banks are Citibank, Wells Fargo and HSBC.

Interest costs, depreciation and sales declines put Barneys in the red last year on a net basis, though the chain made money on an earnings before interest, taxes, depreciation and amortization basis. As for 2009, the company, with seven flagships, two regional stores, 19 Co-ops, 13 outlets and three warehouse sale locations, is projected to reach sales of about $675 million, down from $750 million last year, but generate a small operating profit.

Comparable-store sales should improve in the second half since fall 2008 was way down. There was some uptick in the second quarter, with certain pockets of business performing well, including the Chicago store, the Web site and parts of Co-op, which features contemporary labels and denims.

Like other retailers, particularly those purveying luxury, Barneys has been deeply impacted by the recession. However, the store’s current management structure — without a chairman, ceo or chief operating officer — makes it unique.

Instead, a senior operating committee, comprising the chain’s seven executive vice presidents, is running the show. They represent the top tier inside the chain and are all veterans of the organization, with anywhere from 13 to 30 years’ tenure. The committee meets weekly, usually Tuesday mornings, in the 11th-floor conference room at Barneys headquarters at 575 Fifth Avenue in New York, to tackle anything from cost cutting, sales trends and merchandise receipts to advertising or when to break into sale mode. A formal agenda for each meeting is prepared by the chief financial officer with input from the other executives. After going through the agenda, each executive vice president can bring up any significant matter pertaining to his or her area of responsibility.

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