Saks scaling back its Barneys relaunch plans, CEO says

Economy

The coronavirus pandemic has sidelined efforts to revive the Barneys New York brand, The Post has learned.

Barneys — an iconic high-end retailer that shuttered all of its stores for good in February after filing for bankruptcy last year — had been slated to make a splashy comeback in September as a boutique on the fifth floor of Saks Fifth Avenue’s flagship in Midtown Manhattan.

“We would have had a party and a performance with a famous person,” Saks CEO Marc Metrick told The Post in an interview.

But Saks is pushing back those plans until spring as the pandemic continues to put a damper on dress-to-impress purchases. And the Barneys’ relaunch will be limited to Saks’ New York flagship and a small stand-alone store in Greenwich, Conn. as Saks is also paring back plans to open Barneys boutiques at numerous Saks locations in the US and Canada, Metrick said.

Saks is paring back plans to open Barneys boutiques at numerous Saks locations in key markets in the US and Canada, he said.

The CEO declined to comment more specifically on the timing of the scaled down launch. But he confirmed that social distancing requirements will likely kill the company’s plans for a big party. “I don’t think that works in 2021,” he said.

Barneys — beloved for its annual sales and for bringing many edgy designer to the US, including Armani, Christian Louboutin and Ermenegildo Zegna — remains the fashion industry’s highest-profile casualty in what has become a tsunami of bad news during the pandemic. Now the coronavirus crisis threatens to dampen its revival.

Luxury apparel has taken a huge hit over the past seven months, and Metrick predicts this will continue through the holiday season at Saks’ NYC flagship, known for drawing crowds with its spectacular Christmas displays.The Fifth Avenue store, which accounts for 25 percent of the 45-store chain’s $3 billion revenues, did not pop in September as they normally would for fall fashion season. In fact, they were worse than August. October shows no signs of a let-up due to the dearth of free-spending tourists and wealthy residents, many of whom continue to be hunkered down in second homes outside the city.

On a recent visit to the store, there were racks of men’s suits and jackets sporting 25 percent discounts along with tables of discounted ties taking up nearly half of the sixth-floor men’s department.

The stores outside of New York City, however, are sprouting some green shoots thanks to those customers increasingly splurging on designer shoes, bags and duds from the likes of Gucci, Prada and Louis Vuitton, Metrick said.

Customers who previously shopped at the stores twice a year are now splurging on luxury because they aren’t going on pricey vacations or eating out as much, he explained.

The department store’s overall revenues are flat so far this year compared to the same period last year fueled in part by these “aspirational” customers, as Metrick describes them.

“Right now luxury is significantly down as bad if not worse than the whole 2008/2009 recession,” said Craig Johnson, president of Customer Growth Partners.

It’s in that context that Barneys will be reborn via an unusual strategy that has been questioned from the start given the significant overlap in merchandise between the luxury department stores.

“There are a certain number of people, mostly New Yorkers, who will like having a vestige of old Barneys in its better days,” Johnson said. But for the average customers it remains unclear how Saks will differentiate what Barneys’ offers from the brands it offers, he said.

Share this article:

Source: Read Full Article