Barneys New York, the iconic but struggling luxury retailer had changed hands just prior to the economic slump. Barneys struggled amid the recession without a CEO. It took them over two years to hire Mark Lee, former CEO of Italian luxury brand Gucci. Barneys want to assert their point of view in their stores and have a major difference of opinion with Prada on matters of pricing and inventory control.
Prada wants to lease space from the luxury retailer and control its own inventory and markdowns but Barneys stands by the no vendor leased space. The disagreement has led to Prada restricting its sales in certain categories. At the moment they are only selling their shoes and menswear at Barneys. The flagship space formerly devoted to Prada will soon be occupied by the French designer Azzedine Alaia. Prada has chosen not to comment on the matter at the moment.
The focus of Mr. Lee’s revamping exercise is to obtain ‘exclusives’ with designers which means their products will not be sold anywhere else. This is a difficult task as the designer luxury brands have grown large in size and are big businesses that are difficult to dominate. Mr. Lee has also laid out the largest renovation budget for existing stores that Barneys has. The revamp exercise might see some of their Co-op outposts shutting down but their flagship stores will remain unaffected.