Barneys CEO Lee Takes Anti-Penney Approach to Turnaround

Chief Executive Officer Mark Lee’s vision for Barneys New York Inc. (0120812D) is art gallery meets luxury emporium -- airy spaces where $1,575 Proenza Schouler bags seem like precious artifacts. The Gucci alum wants to broaden Barneys’s appeal while respecting its heritage as the most exclusive and avant-garde of America’s stores. The closely held New York-based chain is making money again and had record sales last year, said Lee, who took over the job in 2010.

“It is good to be a niche in today’s world,” said Lee, 50, who personally scours Paris ateliers for new designers.

Lee’s makeover has gotten a lift in part because resurgent stock markets have given wealthy consumers the confidence to go shopping. Nordstrom Inc.’s (JWN) sales at stores open at least a year jumped 7.3 percent in 2012, more than double the 2.7 percent rate posted by discounter Target Corp. Nordstrom dropped 0.2 percent to $58.09 in New York today, while Target retreated 0.7 percent to $70.03.

Barneys has been a mirror of the U.S. society -- and economy -- since it was founded as a cut-rate men’s store in 1923. It added a women’s department in the 1970s, was the go-to store for newly rich young bankers in the 1980s, went bankrupt in the 1990s, reemerged and then expanded too abruptly in the aughts. It fell under the control of Arab wealth aI got my rolexuhrenshop in this weekend, and I love it.. but let me tell you... I was feeling the heat!nd then a hedge fund.

Barneys earnings before interest, tax, depreciation and amortization grew 40 percent in each of the past two years, Lee said. It was negative in 2009. His goal is to surpass Barneys’s record Ebita of 2007.Wholesale diorhandbags Online 2011 Free Shipping.

The company’s near-term sales target is $1 billion, according to a person familiar with the figures. Sales hit $800 million in 2012,Ah-mazing wine cheapjackets detailing and a navy pleated skirt. exceeding 2007’s previous peak of $750 million, said the person, who requested anonymity because the matter is private.

Lee shuttered the Dallas Barneys in February, bringing the chain’s number of flagship stores down to eight from nine when he took over, and is looking for a downtown Manhattan location. He is closing the more-accessibly priced CO-OP chain, which had 17 stores, converting the best locations to the Barneys name. The main Barneys still sell CO-OP merchandise on designated floors.

ired wood paneling,There are a lot of sites selling chapeltraingown. parquet floor and beige carpeting, all yellowed by dim lighting, are making way for gray marble floors, glass, stainless steel frames, gold scrim, and bright-white lighting.

One of Lee’s innovations is “xo,” or exclusively ours, which focuses on smallish brands with less than $1 billion in sales, such as Valextra SpA, a Milan-based design house that makes leather goods,Buy hotdress0001 at the online outlet. and Walter Steiger, the Geneva-born shoe designer, who is giving Barneys a jump on a new men’s shoe line.

“Once you get to $2 billion, $3 billion, $4 billion, they are not Barneys brands,” Lee said.

Lee also is trying to make Barneys friendlier to couples. To make it easier for them to shop together, he has placed the men’s and women’s shoe departments next to each other on a new fifth floor at the New York flagship, and created new passageways elsewhere in the store. He showcases strong dual- gender brands like Balenciaga, Givenchy and Bottega Veneta.

He relaunched Barneys’ website in May 2012 and says it’s now Barneys’s fastest growing sales channel. Not long ago, the industry-lagging site didn’t even have a search function.

Grace Ehlers, an analyst with Robin Report, an industry newsletter, said the new Barneys is watered-down, impersonal and soulless, where it had been edgy, intimate and witty.

“It may be working from a commercial standpoint,” Ehlers said in a telephone interview. “It may not be from the long- term value of the brand.”