But there’s an obvious question: What could he possibly want with the struggling luxury department store chain?
Originally a discounter for men’s suits — think overstocks, samples and closeouts — on Seventh Avenue and West 17th Street, Barneys hit its stride when it evolved to become the destination where shoppers “discovered” an Armani suit or other high-end European men’s or women’s designer ensembles that couldn’t be found anywhere else in America. However, those days are in the distant past, now that designer brands abound virtually everywhere, and especially online. But Barneys’ initial focus of discovery, however, could still work if it’s successfully re-imagined for high standards of digital retail today.
Barneys needs to settle on a new raison d’etre — streetwear, anyone? — and Ben-Avraham just might hold the answers to the question of how the bankrupt chain can shift gears, and quickly.
Ben-Avraham’s trade shows feature contemporary fashion exhibitors, including some indie brands, that showcase their wares in a format where the show experience is just as important as what’s being displayed on hangers or draped on mannequins. Many of these are the kind of brands that need access to a retail home to get in front of the consumer. And Barneys could be that kind of home.
In an interview shortly after the retailer filed its Chapter 11 bankruptcy petition on Aug. 6, but before Hilldun Corp. was named to the Barney’s Unsecured Creditors’ Committee, Hilldun CEO Gary Wassner told SJ: “There’s still a place for [shoppers to discover brands] at Barneys. If anything, Barneys will be more dependent on bringing in new brands and discovering talent. That’s what will continue to make them unique and differentiate them from their competitors.”
But Wassner said he believes the real potential lies in Barneys’ ability, supposed or otherwise, to deliver on an element of freshness and surprise. “They’ll need more of that discovery factor, so I see them as continuing to sponsor and support young, creative brands,” he added.
Wassner, who WWD reported might be helping Ben-Avraham line up financing for a $200 million-plus offer, did not comment for this story.
So what else would Ben-Avraham bring to the table besides access to new brands?
Possibly a differentiated shopping experience that can engage the discerning digital natives of Gen Z as well as millennials, if his trade shows hint at what’s possible. All of Liberty’s shows showcase a curated collection of young, up-and-coming brands, and Capsule has emerged as the company’s official platform highlighting women’s fashion.
What’s notable are the one-of-a-kind installations designed to inspire choosy retail buyers. And other shows under the Liberty umbrella, such as Cabana in Miami Beach, incorporate exclusive events like panels, runway shows and concerts reserved for attendees. All Ben-Avraham needs to do is transfer that experience to the right kind of consumer platform within the retail store setting.
As experiential retail has become the buzzword du jour, Ben-Avraham could find a fashion-hungry consumer base ready to receive what a revamped Barneys has to offer. Along those same experiential lines, Macy’s is doing what it can to inject more theater and discovery into select stores through its Story acquisition, and fellow department store chain Kohl’s is poised to unveil a shop-in-shops trial showcasing new, data-backed brands most consumers probably don’t even know exist.
A relatively new retail entrant on the experiential front is Showfields, which operates the four-story space at 11 Bond Street in Manhattan. It recently opened its second iteration of limited-time pop-ups aimed at creating Instagrammable expressions of retail “wow,” but in a 3-D format.
The Ben-Avraham backstory
Ben-Avraham planted his roots in retail when he opened Atrium in April 1993. Though the fashion boutique closed its doors in December 2017, in its heyday it operated three locations in Manhattan, Brooklyn and Miami Beach. Atrium carried contemporary clothing from established brands, but over time grew to include new lines from emerging designers and indie brands creating premium wares not just in apparel but footwear and accessories as well.
In essence, Ben-Avraham was already a purveyor in streetwear before the influence of high-end fashion houses propelled the trend firmly into the mainstream.
Ben-Avraham also seems to have a knack for out-of-the-box thinking, which is something a Barneys deal might need to transform the bankrupt chain into a thriving new entity. The fashion mogul is also credited with founding the Project trade show, which is focused on men’s contemporary, premium denim and designer collections.
But Ben-Avraham’s real appeal where a Barneys deal is concerned is his association with Kith.
In 2011, the entrepreneur co-founded nephew Ronnie Fieg’s streetwear brand Kith, injecting financial backing as well. Though Kith began as a men’s footwear retailer, with a high concentration in sneakers, in 2012 it added apparel and women’s fashion followed in 2015. Multi-brand Kith sells other streetwear labels such as Off-White and an array of hypebeast-friendly footwear, beyond its own branded version of street-style staples like sweatpants, T-shirts and hoodies.
And Kith eschews the cadence of seasonal collections followed by most fashion houses, preferring instead the more frequent drop model common to nimble direct-to-consumer startups.
Savior or stalking-horse?
In the meantime, some industry insiders are scratching their heads over Ben-Avraham’s ascendance as a front-runner in the Barneys bankruptcy saga, like Triangle Capital co-founder Richard Kestenbaum, who admittedly is “puzzled” by news of a rumored deal.
Barneys, he said, needs a true overhaul if it wants to skirt a similar outcome in the next go-around. “It’s not enough just to buy it,” explained Kestenbaum, speaking from 35 years of investment banking experience. “You have to have a plan to change and the capital to execute that plan.”
So far, news reports surrounding the Barneys deal have largely been mum on the financials “so it’s hard to know if it can work,” he added. “The idea of just buying it to continue running it as it was does not seem like a great idea.”
And Charles Beckwith, host of the American Fashion Podcast, wonders if the best buyer for Barneys — whether that’s Ben-Avraham or not — will follow in the footsteps of Le Tote’s purchase of Lord & Taylor. Flush with venture capital, digital natives are to Barneys as a bloodhound is to a kitten, he explained in rather colorful terms. An e-commerce-only company still trying to break through might want to throw a couple hundred million of those investment dollars at Barneys for the “name recognition” alone, Beckwith added.
“Everyone who’s got an e-commerce-only brand is stretching toward having at least one brick-and-mortar store,” he said of why Barneys could hold allure for digital players. “And the larger ones want to be in more than one market.”
If Barneys maintains stores in a few key markets — L.A., Las Vegas, Miami and New York, for example — it just might prove to be a powerful touchpoint “to move product” for many of Ben-Avraham’s Liberty Fairs, Capsule and Project brands, Beckwith noted, the kinds of exciting new labels ripe for discovery by a new generation of shoppers.
Though the art of merchandising has for about a decade now been overtaken by the science of data-driven analytical thinking, Beckwith believes Barneys’ pendulum needs to swing back in the other direction.
“There’s so much stuff that’s great that the buyers have been avoiding because leadership doesn’t let them,” he claimed.
Fashion might be obsessed with “all that algorithmic math about what’s going to be popular in a few months” but gut instinct should be afforded a larger role with selecting The Next Big Thing because data doesn’t have the best track record at predicting the future, he said, adding, “The buyers aren’t empowered anymore.”
Ben-Avraham needs to ink a firm agreement with Barneys by Tuesday, the extended deadline lenders have set for the bankrupt retailer to land a stalking-horse bidder or run the risk of being pushed into a full-scale liquidation.
Editor’s Note: This story was reported by FN sister magazine Sourcing Journal. For more, visit Sourcingjournal.com.