Barneys drops Prada
Feb 7, 2011
Barneys New York is to stop carrying Prada. The department store group ceo Mark Lee said the Italian fashion company asked to operate under a "concession" model, in which the brand leases space from the retailer, but controls its owninventory and discounting. Mr. Lee says Barneys rejected the request, and that Prada decided not to sell certain lines, including womens ready-to-wear.
Mr. Lee said Barneys' focus is on "exclusive" brands consumer cannot necessarily find anywhere else. But he acknowledged that in 2011, when many luxury brands have grown to be $1 billion-plus businesses, this will be a difficult challenge.
He has also laid out the largest renovation budget for existing stores that Barneys has seen since the late 1990s, as well as an overhaul of its website. Barneys struggled amid the recession and a lack of leadership. It took the company more than two years to hire its new chief executive, making it one of the longest executive searches in the history of retailing. Mr. Lee took over from Howard Socol, who resigned in May 2008.
Barneys, with 44 stores including outlets, is now owned by Istithmar, the Dubai government's investment arm, which bought it three years ago for $942 million at the height of the luxury boom after a bidding war with Japan-based Fast Retailing that drove the price up by almost $100 million. The deal included approximately $500 million of debt.
Barneys' flagship space formerly devoted to Prada will soon be occupied by the French designer Azzedine Alaia.
Image: Prada SS11