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.
@fearofgod and @maxfieldla have teamed up on a pop-up installation. The store, located in the gallery space across from Maxfield’s Melrose Ave location, is the site of the brand’s House of God pop-up in which Fear of God founder @jerrylorenzo has created a church-inspired installation. A dozen vintage church pews sit in front of an LED screen playing 90s gospel singers in an effort to re-create an environment akin to a Southern Baptist Church, Lorenzo explained. Read more about the pop-up on WWD.com #wwdfashion (📷: Jennifer Johnson)
Known for his sleek, sophisticated American glamour, Norman Norell is the subject of an upcoming exhibition at @fitnyc. “Norell: Dean of American Fashion,” which runs from February 9 through April 14, will feature approximately 100 ensembles and accessories. His best work is exemplified by the designer’s glittering “mermaid” gowns frosted with thousands of hand-sewn sequins – like the one pictured. (📷: William Helburn) #wwdfashion
For pre-fall 2018, @balmain didn’t let go of the glitz. A crystal embroidered baseball jacket priced at around $40,000 hangs in the “couture” section of the brand’s first men’s pre-collection. Sporting the words “Balmain Army” across the back, the item took around two months to make. “When it was completed, it was like Christmas, it was like, ‘It’s done, it’s exactly what I wanted,’” said Balmain’s creative director @olivier_rousteing during a tour of the collection in a Paris showroom on Monday. #wwdfashion
Eighty degree temperatures and outdoor installations at the annual Art Basel Miami Beach called for bright, elevated beachwear. See more street style pictures on WWD.com. #theyarewearing #ABMB (📷: @lifeinreverie)
Following September’s emotional tribute to her brother Gianni, Donatella Versace wanted to bring the spring show’s deep sense of intimacy to her @versace_official pre-fall collection. Donatella found inspiration in Versace Palazzo in Milan and from Gianni’s opulent apartment. Archival patterns and new motifs were splashed on silk shirtdresses and fitted jersey frocks. See the rest of the photos on WWD.com. #wwdfashion
Demna Gvasalia continues to shake up the Paris fashion calendar — and experiment with new runway timetables for his @vetements_official brand. WWD has learned that Vetements plans to stage its next coed show for the fall 2018 season on January 19 during Men’s Fashion Week in the French capital. Details about the timing and venue have not been confirmed — stay tuned on WWD.com to catch the latest. #wwdnews (📷: @giovanni_giannoni_photo)
@zacposen's go-to holiday gift? Cookies! "I'll usually bake cookies and send them as a gift," said the designer, who recently released his cookbook "Cooking With Zac: Recipes from Rustic to Refined." Get the recipe for his Brown Butter-Chocolate Chip Cookies via link in bio 🍪🍪🍪 #wwdeye #cookingwithzac
For @monsemaison’s pre-fall 2018 collection, Fernando Garcia and Laura Kim honed in on the brand’s many signatures — men’s wear, which was tweaked and feminized through deconstruction, proportion play and lots of bare shoulders. See the rest of the photos on WWD.com #wwdfashion (📷: George Chinese)
On Friday night, @yohjiyamamotoofficial received the Design for Asia Lifetime Achievement Award in Hong Kong. The 75-year-old designer has been celebrated for many years and is best known for his dark and avant-garde tailoring. “In my long career, in design, architecture, [I’ve been to] so many parties, this is the very first time that I have such a warm feeling, I really appreciate this,” Yamamoto said. #wwdfashion (📷: @dominiquemaitre)