BEAUTY IN THE BASEMENT, ROUND TWO

Byline: Kerry Diamond

NEW YORK — Exactly two years after Bergdorf Goodman revealed controversial plans to move the store’s beauty department to the basement, Barneys New York has announced it will be doing the same at its Madison Avenue flagship. The new, expanded department will open in fall 2001.
According to industry sources, the decision to move the beauty department downstairs to the space currently occupied by the popular lunch spot Fred’s was made by Allen Questrom, former chairman, chief executive and president of Barneys who left for J.C. Penney Co. last month.
The relocation news surprised many in the industry, given the challenges that Bergdorf’s has faced since its “New Level of Beauty” opened for business last November. Two of the biggest concerns about the Bergdorf beauty department have regarded the accessibility of the department and its uniform look.
One of the biggest critics of the basement relocation trend in general is William Lauder, president of Clinique Laboratories. “I’m not thrilled with it and the jury is still out on the success of the Bergdorf move to the basement,” he said. “I certainly hope that Barneys has escalators that go in both directions and that are easy to find. Bergdorf’s just trapped their customers down there.”
“We’re in the real estate business,” Lauder continued. “Location, location, location. We fight battles over who gets the best real estate. Put me in the basement and guess what? I’m not getting as many eyeballs. You don’t walk through the basement to get anywhere. I respect the decision of Allen Questrom, but he’s off to J.C. Penney’s and he won’t be there to make sure it works.”
Michelle Taylor, the new general manager and senior vice president of Kiehl’s, said one of her biggest concerns about the new department is how Barneys will address the impulse purchase. “Many times, a woman comes into the department not intending to buy anything,” she said. “Barneys has to compensate for the lost impulse factor, but we are confident the team will do that.”
Jean Hoehn Zimmerman, Chanel’s executive vice president of marketing and sales for beaute and fragrances, has several concerns about the move, but she noted that there is a significant difference between the two specialty stores. Barneys, she said, already has a thriving business in the basement. Bergdorf’s did not have any retail activity on that level. “The first year has been extremely tough at Bergdorf’s, but things are improving,” she said. “We’re on a very positive roll at Barneys and we’ll be very careful about not upsetting something that isn’t broken.
“Some of the issues with Bergdorf’s have been line identification, but they have made great steps to try to improve that,” she added. “One lesson Barneys could learn from Bergdorf Goodman is not to be generic. There has to be enough identification not to confuse people.”
Lev Glazman, chief operating officer of Fresh, isn’t terribly worried about the move. “Cosmetics can survive in that environment as long as it’s done right. I’m sure Barneys will do something that looks great,” he said. “You know, Bergdorf Goodman did a beautiful job, but sometimes there is an issue of entering the department.”
As for Fresh’s business at Bergdorf’s, Glazman said he wasn’t sure how the location was impacting sales. “I’ll be able to see once we have a full year there and a second holiday season.”
Maree Lavo, vice president and divisional merchandise manager for cosmetics at Barneys, said the company is taking all vendors’ concerns into consideration, but the reality is that the department needed room to grow.
“We’ve been so successful in cosmetics that we needed to look at opportunities to expand our existing business,” she said. “We will use every opportunity to get our clients downstairs in a comfortable fashion.”
Although there are few specifics about the new department that she could discuss, Lavo said there will be a major staircase leading from the front entrance to the basement. There will also be elevators, escalators and an entrance on 61st Street.
New brands will be added to the mix, but “that won’t be the thrust of the expansion,” she noted. “It’s more about helping the existing businesses.”
In other Barneys news, a 300-square-foot Bobbi Brown concept shop will open on Saturday in the Madison Avenue flagship. It is the first time Barneys is carrying Brown’s products.

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