Most likely, a plan to re-brand its contemporary business, currently called The Collective, to Barneys.
It would be a low-cost maneuver to cast a brighter light on contemporary fashion at Saks, potentially lifting the business. A Barneys identity could resonate more with customers than The Collective has done.
Last month, Authentic Brands Group finalized its $271 million deal to buy Barneys New York out of bankruptcy and raised eyebrows by saying it would open 40 Barneys shops at Saks Fifth Avenue locations. These would include a 50,000-square-foot Barneys inside the Saks flagship in Manhattan, all through an agreement with Hudson’s Bay Co., the parent company of Saks.
Saks operating the Barneys web site is another possibility.
In luxury retailing, it’s customary to brand the contemporary department. Bergdorf Goodman has “5F.” Neiman Marcus previously labeled contemporary as “Cusp,” and at Barneys, contemporary was identified as Co-op. Saks’ contemporary floor could be called Barneys or “Barneys Co-op at Saks Fifth Avenue.”
To pull off the re-branding, heavy lifting isn’t required. Saks could create a new logo, new shopping bags, add social media and maybe even uniforms for sales associates, to cast a Barneys’ identity within the walls of Saks. Saks has the square footage and the brands in its matrix already — nothing much needs to change there — and could also pick up a few labels that Barneys had sold exclusively.
“We don’t know yet exactly what Saks is going to do and I would not expect them to spend a lot of capital on Barneys or have separate Barneys stores. But for Saks, it is an opportunity to bring in another customer to the store, a more fashion-forward customer,” said Stephen Sadove, principal of Stephen Sadove & Associates and former chief executive officer of Saks Fifth Avenue. “Maybe Barneys becomes a part of the contemporary floor at Saks. I don’t know if the entire floor gets re-branded. The Saks contemporary department is very different in size at different Saks stores.”
Barneys’ private label is also a possible addition to Saks stores, Sadove added. Barneys’ private label, particularly in men’s and often sourced from top mills and tanneries, has been high-quality and popular.
“There are different ways you could bring Barneys to life at Saks,” Sadove said. “The web site is another way of attracting the Barneys customer. You could use the technology of the existing Saks site, use the engine that Saks has already invested in and have a Barneys web site powered by Saks. It becomes very efficient.”
One retail source said, “Barneys is not a huge opportunity for Saks. I don’t see it as transformative. The biggest piece of the deal is that it takes a competitor [Barneys] out of the market, though it’s still a very competitive market.”
“Basically, they could put up a Barneys sign over the contemporary area, use Barneys shopping bags and create a Barneys vibe,” said another retailer in the luxury zone. “At the end of the day, the merchandise is primarily Saks Fifth Avenue merchandise. They could also run the Barneys web site using Saks merchandise but the skin of the web site is Barneys,” possibly with more of a Barneys fashion-forward edit. “They really don’t have to have separate inventories or separate buyers. I think the thing is a very low-cost way for him [Richard Baker, the executive chairman of HBC] to play around with Barneys. ”
Of all the Saks stores across the country, the one in Beverly Hills on Wilshire Boulevard stands to gain the most with a Barneys tie-up since the two stores are on the same block, the source noted. “Some Barneys customers could flow right in to Saks,” the source said. Barneys, which went bankrupt last August, has commenced a store closing at its flagship on Madison Avenue and 60th Street store, advertising “a sale like never before or ever gain.”
The idea of re-branding The Collective at Saks to Barneys fits with what Jamie Salter, head of ABG, has said about the future of Barneys at Saks. He said there would be a 50,000-square-foot Barneys shop on the fifth floor of the flagship in Manhattan. Saks operates a 36,268-square-foot Collective there with a boutique-y feel and lots of mixing brands in the same vignettes to “collectively” depict a trend or a color palette, display outfits composed of a few labels, and lean into looks and lifestyles rather than spotlighting designer labels.
When the Collective opened two years ago, Marc Metrick, the president of Saks Fifth Avenue, described it as “really de-departmentalizing of the department store — giving the customer fashion, rather than a sea of brands.…In the old days, you would walk onto the floor and see a big brand message. This is a more flexible environment that gives you the ability to constantly inject newness to the floor.…There’s an ease of shopping the floor and a sense of discovery,” Metrick said.
Salter also was quoted as saying Barneys would open in Greenwich, Conn., which is where Saks operates a 14,000-square-foot freestanding Collective store. When that store opened in 2015, Tracy Margolies, Saks’ chief merchant said of Collective, “It’s not about age. It’s about lifestyle, representing fashion, dressing women of all ages and making her feel current, elegant and fashion-forward. It’s about us standing for key trends, key items and being first to launch emerging designers.…It’s a re-branding of our contemporary business.”
And now, with its Barneys license, it may be time for another re-branding of contemporary at Saks.
Saks declined to comment for this story.