Barneys New York: What Went Wrong

The numbers didn’t work at Barneys New York for years. Its high cost structure — exacerbated by this year’s steep rise in rents — too many oversize stores with too little traffic and insufficient business; elaborate marketing campaigns, and a revolving door of owners and management wore down Barneys to the point of bankruptcy. And now, there’s another new owner in the form of Authentic Brands Group that’s radically altering and paring down the business. “It’s a sad, sad story. Barneys had a terrific group that was so loyal to that company,” commented Allen Questrom, the former chief executive officer of Macy’s Inc., J.C. Penney Co. Inc., Neiman Marcus Inc., and Barneys, which he ran from May 1999 to September 2000, helping stabilize the business. Beyond the lack of liquidity, there’s another explanation for the demise: Barneys lost its cool and its edge. In a fast-moving digital world, Net-a-porter, Matchesfashion, Farfetch, Moda Operandi, ShopBop and other emerging web sites took the wind out of Barneys, which was very much a Johnny-come-lately to e-commerce. And Barneys’ whimsical windows that routinely satirized pop culture figures like Madonna or Oprah Winfrey eventually got played out. “There’s only so much cool to go around,” said one retail ceo,

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