A hard-fought battle to save bankrupt Barneys New York’s stores has come to an end today with confirmation that luxury retailer sealed the fate of most of its domestic stores by way of a finalized deal with Authentic Brands Group.
Naturally, ABG’s planned liquidation of most Barneys U.S. outposts will yield a number of layoffs and resignations. The first major one, reports WWD, is that of Barneys CEO Daniella Vitale, who announced her departure today.
Vitale, in an email sent to staffers this morning and obtained by WWD, wrote that she “truly apologized for the difficulties that we caused” — presumably referring to the contentious bankruptcy process — adding “please know we did everything we could to avoid this situation and protect the Barneys brand.”
“It is with deep regret that I announce my resignation as chief executive officer and president of Barneys New York,” the letter read. “Today is my last day with the organization. I hope you’ll accept my profound thanks for your continued support and encouragement. I truly apologize for the difficulties we caused, but please know we did everything we could to avoid this situation and protect the Barneys brand.
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“The many, many years of success at Barneys would not have been possible without your partnership,” she added. “Thank you for allowing me to be part of your wonderful brand. Working with all of you has been one of the highlights of my career.”
Vitale, who joined Barneys in 2010 as EVP and chief merchant, had worked her way up to the CEO slot in 2017 when she unveiled an ambitious plan to recalibrate the business.
“The way we operate our business has to change,” she told FN when she took the helm that year.
Under Vitale’s leadership, Barneys had rolled out several modern and transformative strategies including its adoption of “the drop” — in hopes of harnessing the buzz akin to that of sneaker launches. Vitale also help expand the iconic luxury retailer’s vendor partnerships by forging relationships with unexpected labels like Birkenstock. The leader was also integral in pushing Barneys to lean more on data to drive its business decisions.
“Data has probably been the biggest point of contention in our company,” Vitale told FN in 2017. “The company felt it would make it less creative or too rigid. But it allows us to make much more informed decisions. It’s about what best for our customer.”
Since Barneys filed for bankruptcy protection in August — amid skyrocketing rents and shifts in consumer shopping habits — the Manhattan mainstay had seen potential bidders duel it out over its fate. Other than ABG, which emerged victorious, the most notable suitor was Sam Ben-Avraham and a team of fashion leaders who had put up a going-concern bid, which sought to keep open at least five flagship stores, two outlets and the distribution center, as well as save thousands of jobs and hundreds of vendor partnerships.
Ultimately, Barneys entered into an agreement to sell its intellectual property to ABG and B. Riley in a cash deal estimated at roughly $271.4 million.
As part of the court-approved transaction, the brand management company — which submitted a liquidation bid — had said it would shutter all of Barneys’ seven existing stores, including the Manhattan flagship on 660 Madison Avenue, and license the name to Saks Fifth Avenue, which will create private-label merchandise and build shop-in-shops inside some of its locations.
In a statement today, however, ABG noted it has plans for a “new freestanding store in a key U.S. market” and would “[evolve] the Madison Avenue location into a pop-up retail experience, bringing together an eclectic curation of boutiques, art and cultural installations and exhibits, and entertainment that fosters creativity and community.” Regarding the Saks partnership, ABG noted today that its “first order of business will be to reboot Barneys New York on the fifth floor of Saks Fifth Avenue’s newly renovated New York City flagship,” and that it will also move forward with a launch of Barneys shop-in-shops in key Saks markets in the U.S. and Canada.
ABG sales also plans to grow Barneys’ presence through high-fashion collaborations and namesake products, as well as expand it in key international markets, particularly in Asia, where it would be able to build on the success of the chain’s stores in Japan. (All 12 Barneys’ stores in Japan remain open.)