By  on November 10, 2010

Barneys Co-op called out the contemporary category years before Scoop, Intermix and Cusp were in business. Yet the vision has never been quite fulfilled.

That’s now up to Mark Lee, the former Gucci chief executive officer who joined Barneys as ceo eight weeks ago and is about to write a new road map for the Co-op division. “He is starting to make the rounds,” said David New, Barneys executive vice president of creative services for Co-op and its big brother, the Barneys New York luxury chain. “He needs time to sit back and look at everything. There will be a lot of analyzing of what we do and how we do it.”

“You’ve got to believe Mark Lee will drill down into this business in a way not seen in a while,” said a ceo of a major supplier to Barneys Co-op. “He will give Co-op a different perspective. They buy a line with their own specific aesthetic and point of view that’s just different from other retailers. It’s very urban and esoteric. It’s worked for a number of years, but sometimes it’s a little too esoteric. Barneys could have a little more feminine perspective.”

Locations, the marketing and the merchandise mix — premium denim, established contemporary designers such as Diane von Furstenberg and Theory and emerging designers such as Carven — are under review. The organizational structure could change as well, considering that to a large extent the staff is shared with Barneys New York, saving costs, and a new point of view could achieve better results.

Barneys officials, with the exception of Lee, last month agreed to discuss Co-op in light of its first opening in Brooklyn, at 194 Atlantic Avenue in Cobble Hill, and because the chain is celebrating 25 years in business this year. They portrayed the Co-op business as profitable, performing best in Manhattan, where there are three freestanding locations; in California, where there are four, and inside certain Barneys New York flagships, including Madison Avenue and Beverly Hills.

They also said Co-op will continue to open stores, though they’re not ready to announce where. In addition to Brooklyn, another Co-op opened in Santa Monica Place in Los Angeles in August. “We consider Co-op a growth vehicle,” New said. “It’s one of the strongest parts of our business. Some stores do really well.”

A few closings are also in the cards, with at least two set for next year, in the Houston Galleria in January and the Westchester Mall in White Plains, N.Y. by March. The Co-op chain is said to account for between 10 and 15 percent of Barneys New York’s total sales, which came to $650 million last year. Co-ops range from 6,000 to 10,000 square feet in size.

The mystique and irreverence of the larger Barneys New York flagships — on Madison Avenue and in Chicago, Beverly Hills, Dallas, San Francisco, Las Vegas and Boston — rubs off on Co-op. However, Co-op has escaped much of the scrutiny and industry concerns about consumer traffic and locations that have dogged the full-line Barneys New York. Some industry sources believe that there could be a more robust future in the Co-op format, considering the smaller footprints, lower costs and lower price structure, though the merchandise is hardly inexpensive, with an emphasis on premium denim jeans including labels from Japan in the $400 to $500 range.

When the first Co-op site was launched in 1985 inside the former 17th Street and Seventh Avenue flagship, it was conceived by Gene Pressman, then co-ceo, as a casual and affordable component giving greater balance to a store with expensive designer and artisan merchandise. Pressman never envisioned it as a freestanding chain, and it wasn’t until 2000 that the Co-op roll out began. The evolution has been hindered by other priorities, such as building Barneys’ full-line flagships and keeping the company together amid ownership changes, tenuous relations with factors and vendors and the absence of a ceo for two years until Lee’s arrival.

A glimpse of how Co-op could evolve can be seen at the new store in Brooklyn. It’s restrained in design, in the amount of merchandise displayed compared with other units and in the degree of whimsy projected as well, though Barneys did create fake fuse boxes and pipes on the walls, next to real ones, to enhance the industrial look. “We are consciously trying to provide a little more of a designer presentation,” said New during a tour of the store. “This is not as dense as some Co-ops. We’ve created a setting where you can really see the merchandise.”

There’s also a “formalized” window with a back wall to better showcase designers, and windows with views to the inside.

“This is a little bit of an experiment,” New said. “More of a lab. We will study it, and nurture it.”

The inspiration was an artist’s studio and residence (albeit a successful artist), with drafting tables and found objects used for display and artwork in the fitting rooms. “When we first sat around and started thinking about the store, we decided we wanted a gallery feel [to help blend into Brooklyn’s artist community], with the upper floor like a gallery space and the lower floor the artist’s residence,” said New.

One surprise is that there are no shoes, enabling Co-op to bolster other categories. Co-op’s shoe presentations tend to be limited anyway, though the category could be added down the road if enough consumers express interest.

As at other locations, Barneys capitalizes on the staircase to make a design statement. It’s heavy black steel but light in feeling, since it hangs down from the first floor, has glass panels on the side and has no stringers. There is also a second cutout on the main floor for a view to the lower level. That makes the store feel airier and helps draw customers down to the lower floor. “In general, we try to be open and loftlike, but this is not a cookie cutter,” New said.

With its long, 100-foot frontage, the store seems to anchor the block, in an upscale way impacting the area. The Brooklyn location is among the largest Co-ops at 10,000 square feet gross, including 6,000 on the street level and 2,000 on the lower level. The Co-op in Chevy Chase also has 10,000 square feet.

Currently, Co-op is doing best in dressier, modern suiting and sophisticated tailored sportswear in men’s wear, including Thom Browne, Rag & Bone and Shipley & Halmos. Sophisticated and feminine sportswear, such as the new label Carven, exclusive to Barneys, is also selling well. For the anniversary, Barneys collaborated with Swash on graphic printed silk scarves and Marc Jacobs and Moleskine on note pads, and there are tote bags containing a hoodie, a Henley and a V-neck T-shirt, all Co-op branded. Twenty-four designers for women, and 17 designers for men created limited edition pieces, including 3.1 Phillip Lim, Alexander Wang, A.L.C., Levi’s Vintage Clothing and Raleigh Denim. In addition, there are updated versions of original designs that debuted at Co-op over the years, such as a reissued striped sweater from Rogan and a denim jacket from the first Marc by Marc Jacobs collection.

“If you look at the landscape, a lot of independent specialty stores are in trouble,” said the supplier, who requested anonymity. “But I think Co-op, Intermix and Scoop can have a big future. Each has their own point of view and aesthetic. If you are a contemporary customer, shopping in these environments can be more appealing than a department store. I believe Mark Lee will work very hard to push the Co-op business forward. He’s a guy with serious experience. He took this job because he has a real vision for where he can take Barneys and Co-op, not just because he needed a paycheck.”

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