Barneys New York
|Fate||Chapter 11 bankruptcy|
New York City, U.S.A.
|Headquarters||575 Fifth Avenue, New York, New York, U.S.|
Number of locations
|Products||Clothing, footwear, bedding, furniture, jewelry, beauty products, and housewares.|
Pressman family ownershipEdit
Barney Pressman opened his first store in a 500-square-foot (46 m2) space with 20-foot (6.1 m) of frontage at Seventh Avenue and West 17th Street in Manhattan in 1923. He raised the $500 to pay the lease by pawning his wife's engagement ring. Barney's Clothes were stocked with 40 brand name suits and a big sign with a slogan, "No Bunk, No Junk, No Imitations." Barney's sold clothing at discounted prices by purchasing showroom samples, retail overstocks, and manufacturers' closeouts at auctions and bankruptcy sales. He also offered free alterations and free parking to attract customers. And this first of its kind store landed Barney Pressman on many TV and Radio shows.
Pressman claimed to be the first Manhattan retailer to use radio and television, beginning with "Calling All Men to Barney's" radio spots in the 1930s that parodied the introduction of the Dick Tracy show. He sponsored radio programs featuring Irish tenors and bands playing jigs to advertise Irish woolens. Women encased in barrels gave away matchbooks with the store name and address. He also chartered a boat to take 2,000 of his customers from Manhattan to Coney Island.
In a 1973 interview with Business Week, Fred Pressman, Barney Pressman's son, became "convinced that the discount route definitely was not for us. My father and I have always hated cheap goods ... I didn't want to sell low-end merchandise. Now, many of those who chose to are verging on bankruptcy." Fred Pressman's obituary in The New York Times stated:
With his father's blessing, Fred Pressman slowly transformed the store from a salty discount house that sold roast beef sandwiches in its pub to a purveyor of Italian designers with a cafe serving Perrier and light salads. He began to discard the types of suits that his father was prone to unearthing at auctions and bankruptcy sales, peppering the racks instead with then-obscure and top-name designers both, but continued to offer touches like free alterations that gave Barneys its reputation.
Pressman is quoted saying, "The best value you can offer a customer is personal attention to every detail, and they will return again and again. Ultimately, the customer cares the most about how he or she is treated." Pressman died in July 1996.
In 1970, Barney's built a fifth story onto its original building and a five-story addition. The original store was renamed America House and the addition was named International House. The expanded store occupied the entire Seventh Avenue block (between 16th and 17th streets), with 100,000 square feet (9,300 m2) of selling space and 20 individual shops.
International House, Fred Pressman promised, would feature complete collections of European designers, "from denim pants to $250 suits", not just a watered-down "potpourri of fabrics and models". The renovated America House, he said, would hold merchandise from "manufacturers who are in effect designers."
By 1973, the store was stocking 60,000 suits. It carried the full lines of designers such as Bill Blass, Pierre Cardin, Christian Dior, and Hubert de Givenchy. It became the first clothing store in the U.S. to stock the full line of Giorgio Armani, after signing an agreement in 1976. Barneys is widely credited to have introduced Giorgio Armani to the American public.
Women's clothing was introduced in 1976 on the third floor of the International House. The next year, the women's store relocated to The Penthouse, a new top-level enclosure. Barney's also added housewares, cosmetics, and gift departments to the store. Also in 1977, Barney's in-store restaurant was renamed The Cafe and began selling salads, soup and sandwiches.
The company dropped the apostrophe in Barney's in 1981. In 1981, the women's penthouse became a duplex. Barneys imported 80% of the women's and 40% of the men's merchandise. The $25 million, 70,000-square-foot (6,500 m2) women's store finally opened in 1986 in a row of six townhouses and two larger adjacent buildings across the store along 17th Street. The addition included a unisex beauty salon and restaurant, antiques, and accessories, gifts, and housewares departments. It accounted for about one-third of Barneys' sales of some $90 million the following year.
In 1988, Barneys opened a 10,000-square-foot (930 m2) men's store in the World Financial Center. In 1993, the store abandoned its Seventh Avenue flagship, moving to the current 230,000-square-foot (21,000 m2), 9-story, Kohn Pederson Fox - designed Manhattan store on Madison Avenue at East 61st Street. It was the largest new store in New York City since the Great Depression. The store is a 22-story building with 14 floors of offices above the store. The wood floors, a marble mosaic on the lobby floor, gold-leaf ceilings, and lacquered walls of the new Barneys store cost $267 million, according to one source.[who?]
In 1989, the store formed a holding company with Japanese department store Isetan to operate stores in both countries. The first Tokyo store opened in November 1990. The agreement also called for the holding company to spend $250,000 to open 30 smaller stores of approximately 6,500 square feet (600 m2). The earliest of these smaller format stores opened in Costa Mesa, California in 1990.
In 1995, the Pressman family intended to close the investment relationship with Isetan consolidating the Barneys retail business and Isetan investment in the United States real estate for the Barneys flagship stores in New York, Chicago, and Beverly Hills. At the conclusion of this consolidation, the real estate investment and the retail businesses would be held in one company.
During the consolidation effort, Isetan's final funding of the real estate investment was intended to be processed through a Pressman family holding company, PREEN (Pressman Robert Eugene Elizabeth Nancy) and then directed to the real estate development. Instead of the funds flowing directly through the holding company to the real estate investment, they were given in exchange to BNY Licensing (another Pressman family company that held the Barneys trademarks) for the projected 50 year royalty stream due BNY Licensing from Isetan for their Barneys Japan business. Isetan was unaware of this transaction at the time.
Isetan had reported their investment in Barneys earlier in the year as a current asset expressing their intent and belief that it would be concluded in 1995/first quarter 1996. Isetan considered the handling of the final investment a breach in trust and stopped efforts to consolidate the investment and the Pressman family business.
In December of 1995, under the advice of John P. Campo of LeBeouf, Lamb, Greene & MacRae and Anthony Grillo of The Blackstone Group, the Pressman's recognizing that consolidating the investment and the business was no longer viable, voluntarily filed for Chapter 11 Bankruptcy. It was believed that, only in bankruptcy court, could the agreement between the Pressman family and Isetan be dismissed and a new agreement be authored. The strategy failed.
The company filed for Chapter 11 Bankruptcy in early January of 1996. The bankruptcy allowed the company to close stores that were opened early in the company's expansion and were no longer consistent with the company's go forward strategy. These stores included stores in Cleveland, Ohio, Costa Mesa, California, Dallas and Houston, Texas and Short Hills, New Jersey. In subsequent years, management would re-enter some of these markets with larger flagship stores.
2000 to presentEdit
On December 20, 2004, the Pressman family sold its less than 2% remaining ownership to the Jones Apparel Group, which in turn sold the company in September 2007 to Dubai-based private equity firm Istithmar PJSC for $937.4 million. Included in Istithmar's purchase was an estimated $500 million in debt. "The luxury market took a sharp turn for the worse after Istithmar's acquisition of Barneys. U.S. sales of high end clothing, fragrances and accessories slipped 14% in 2009, according to Bain & Co. Although luxury was a star performer over the 2010 holiday season, spending trends have yet to recover to pre-recessionary levels. The privately held company doesn't reveal financial results but said that EBITDA rose by $30 million in 2010."
Howard Socol, Barneys' former CEO, resigned shortly after the change in ownership. The company failed to fill the position for over two years until it appointed Mark Lee to the post in September 2010. Lee is the former chief executive of Gucci Group and has consulted and sat on the board of many other fashion companies. Since Lee's appointment, Barney's has experienced changes in its staff, advertising, and website. Amanda Brooks, former creative director of Hogan, replaced long time fashion director, Julie Gilhart. Lee's former Gucci colleague, Daniella Vitale, replaced Judy Collinson as head merchant. Former creative director Simon Doonan, now creative ambassador-at-large, was replaced by Dennis Freedman.
Barney's advertisements and catalogs are usually shot in-house, but for Spring 2011 candid shots by art photographers such as William Klein, Nan Goldin and Juergen Teller were taken behind-the-scenes during New York Fashion Week. Some existing stores will face new renovations such as the in Madison Avenue location's main floor and Co-Op levels. The traditional red awnings have been changed to black. Barneys' website has been revamped and has launched a new site called "The Window" which is the retailer's primary "social media landing page"—a window into the Barneys world, with news about fashion and happenings at Barneys stores.
As of February 2011, Barneys no longer sells Prada with the exception of shoes and menswear because of disagreements concerning prices and inventory control. Prada wanted to lease space, but control its own inventory and markdowns under a concession model. Barneys declined.
In May 2012, Perry Capital acquired a majority ownership of the company which reduced the its $590 million debt to $50 million. It will have three seats on the seven-member board. The former majority owner Istithmar World as well as new investor Yucaipa Cos will also be on the board as will current executive chairman Mark Lee.
In December 2013, Women's Wear Daily announced that the retailer will be returning the portion of its original Seventh Avenue site being vacated by bankrupt Loehmann's. In January 2014, Barneys will use transgender models in advertisement for its 2014 advertisement campaign.
In February 2016, Barneys New York returned to its original Seventh Avenue location in Chelsea opening a four-story Flagship store.
Daniella Vitale was named chief executive officer, succeeding Lee, in February 2017.
On August 6th, 2019, Barneys New York filed for bankruptcy once more. Fifteen stores will close as part of the bankruptcy filing, including Barneys flagship stores in Las Vegas, Chicago, and Seattle; smaller-format stores in Los Angeles, New York, and Philadelphia; and all but two of its outlet stores.
Barneys New York operates five flagship department stores in the United States.
Freds restaurants operate inside of the Beverly Hills, Madison Avenue, Downtown NY, and San Francisco locations.
In 2014, the company announced plans for a flagship department store at Bal Harbour Shops in Bal Harbour, Florida as part of a planned expansion of that shopping center. The 53,000-square-foot (4,900 m2) store will open in 2023 with the new portions of the center.
Barneys New York closed its flagship store at Northpark Center in Dallas in 2013. Its store at Scottsdale Fashion Square in Scottsdale, Arizona followed in 2016. The company opened a free-standing men's store in San Francisco in February 2016 and in summer 2018 announced it would add a restaurant.
Two warehouse stores operate in addition to the company's full-line business. Six full-line Barneys stores and six warehouse stores operate in its Japan division.
Barneys New York CO-OPEdit
Established in 1986, the Barneys New York CO-OP originally existed as the contemporary department within Barneys flagship stores. Created to house trendier and less expensive product than the rest of the store, the CO-OP was aimed at younger shoppers with smaller budgets than a traditional Barneys customer. The CO-OP department was spun-off into a separate chain of stores in the 2000s, primarily located in shopping malls and lifestyle centers. At its height, there were more than 20 CO-OP stores throughout the United States.
In 2013, Barneys retired the CO-OP name. Several CO-OPs were converted into boutique versions of the flagship Barneys New York brand, but most closed.
Use of "Co-op" in nameEdit
The 2010 opening of the Brooklyn, New York CO-OP location raised some concerns among members of the Park Slope Food Coop regarding the use of the term "co-op" by a for-profit corporation. According to the general manager of the Food Coop, Barneys's use of the term is a violation of the New York State Cooperative Corporations Law.
Barneys has been repeatedly accused of racially profiling its customers throughout the years. In 1996, Johnnie Roberts, a journalist for Newsweek, published an account of an incident taking place in the spring of 1990 in which he was mistakenly accused of shoplifting because of being an African American.
In 2013, Trayon Christian, a 19-year-old African American, purchased a $350 Ferragamo belt and was arrested shortly after leaving the store. The police had received a call from the store claiming that the debit card used was fraudulent even though the customer provided proper identification at the time of the purchase. The officers questioned Trayon on how he was able to afford the purchased belt and accused him of using a fraudulent card. He was handcuffed, detained in a holding cell for two hours and interrogated further. He was later released after the police contacted Chase Bank to verify ownership of the card.
Another African American shopper, Kayla Phillips, has also come forward with a similar claim after she purchased a $2,500 Céline handbag with her debit card. Both shoppers believe they were targeted because of their race after they purchased costly items and have stated they intend on filing discrimination lawsuits against the store.
As a result of these high-profile cases, Al Sharpton has threatened to boycott the store and has compared its racial profiling to the stop-and-frisk policy practiced by the NYPD. Fans have also petitioned Jay-Z to sever his ties and partnership with the retailer.
After much debate and speculation, mogul Jay Z spoke out. The New York Daily News claimed that he must either back away from his partnership with the chain or face "Zero Respect". However, Jay Z responded saying that he would look into the matter more thoroughly rather than make a snap judgment, stating "I move and speak based on facts and not emotion." A few days later, Jay Z spoke out again stating that his deal with Barneys would continue as planned, with the condition that he be placed in a leadership role on a committee specifically organized to deal with racial profiling in the store. Also, more conditions will be added to this deal. All of the proceeds of the BNY SCC collection will be donated to Jay Z's charity, the Shawn Carter Scholarship Foundation. This is a major increase from the 25% of the proceeds that was initially agreed upon. As well, Barneys also agreed to donate 10% of all retail of all stores nationwide as well as its web store, Barneys.com, on November 20, 2013, which would guarantee a total of at least one million dollars.
Live butterfly displayEdit
In 2018, Barneys used live butterflies to introduce a new line of jewelry and accessories, asking customers and employees to interact with monarch butterflies as they flitted around display cases in the Beverly Hills store. PETA reported "that there were many dead and dying butterflies languishing around the display area, behind plants and in plant beds." Barneys responded by banning the use of live butterflies from any future promotions and making a donation to PETA as an apology.
In 2015 the union busting firm Kulture Consulting, LLC was hired. According to a Department of Labor document Kulture “presented informational meetings to company employees relative to the process of unionization” at Barney's locations in Beverly Hills, Chicago, Las Vegas, and San Francisco. In Chicago representatives from the labor union Workers United claimed that "management called workers into one-on-one meetings" and engaged in "scare tactics". In December of 2018 Barneys hired Kulture Consulting to present "informational meetings" with employees at its Las Vegas location.
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