Questrom likes to say that Kelli -- "the quintessential Barneys shopper," as one friend describes her -- actually made the decision for him. "My wife basically kicked me out of the house." He is leaning back in his seat at the round conference table in his Fifth Avenue office, popping lozenges cautiously. Tall and trim and bespectacled, he is a study in English tailoring. His urbane but guarded pose -- not to mention a Boston accent as heavy as a Kennedy's -- evokes more politician than shmatte magnate. And despite running references to himself as "just an old man," Questrom looks a decade younger than his 59 years. Teasing self-deprecation is part of his shtick, and it's how he charms the employees, customers, and creditors alike. Which is what he needs to do if he wants to make Barneys a little less fabulous and a lot more profitable.
The most seasoned CEO might be daunted by the task at Barneys, but Questrom seems unruffled. He's game enough to forfeit a salary in favor of an undisclosed amount of equity in the company -- which could be a gold-rush payoff if the talk of taking Barneys public turns out to be more than speculation.
Questrom, after all, is no stranger to a high-stakes turnaround. In 1990, he was known as the $12 million man for the amount Federated offered him -- $2 million a year for five years (plus a $2 million signing bonus) -- to turn the overleveraged department-store dinosaur into a powerhouse. He did it in three years. Under him, Federated was transformed from a $15 billion, 400-plus-store white elephant into a retail leviathan. For an encore, he snapped up the competitor R.H. Macy & Company.
This was the crowning achievement for a man who, until then, had spent nearly his entire career at Federated. Questrom started out on the training floor of the A&S store in Brooklyn 35 years ago. He moved up quickly though the ranks, reviving the Brooklyn flagship in the process. A&S is also where he met Kelli, the pretty, pixieish girl he would later marry.
For his work in Brooklyn, he was anointed Federated's turnaround guy and sent around the country to nurture the ailing and orphaned divisions. His first executive stint was presiding over Rich's, a family-run department store in Atlanta, where he settled squabbles among feuding factions and turned the struggling division into the corporation's most profitable one.
A dramatic success to his credit, Questrom was ready to leave the South and head for a bigger challenge. When the board couldn't provide one, he took off on his first self-imposed sabbatical. He came back when Federated offered him the chairmanship of Bullock's, a glitzy department store in Los Angeles, which he turned into the premier shop in the city. More than triumphing in business, the Questroms found a cultural home in Hollywood Hills. The couple embraced the Southern California lifestyle as social diplomats, becoming regulars on the gala circuit (Questrom loves to dance; a department store executive says, "He and Kelli are the first ones on the dance floor -- and sometimes the only ones"). They sat on boards like that of the Los Angeles Museum of Contemporary Art, headed up charity foundations, and collected contemporary art.
Kelli is an astute collector, as Questrom attests: "My wife was collecting Basquiat two years into his career. She has a great eye." Kelli, who worked as a marketing director at Ralph Lauren, has a reputation for cutting-edge taste. As one fashion buyer gushes: "Kelli is so elegant -- she is one of the few women who can pull off Romeo Gigli, which is not easy."
In 1988, Questrom's charmed life took a very erratic turn when Canadian real-estate tycoon Robert Campeau gobbled up Federated in a hostile takeover -- once called "the biggest looniest deal ever." Divisions were broken up and sold off. Questrom, watching in horror as years of work unraveled, said good-bye and set off for his next retirement. Days later, Neiman Marcus called looking for a leader to guide the legendary Texas store. Questrom spent the next two years expanding it into a luxury chain until Federated's desperate directors dangled the $12 million and begged him to return to the fold.
Though he prefers to treat his latest turnaround job as nothing more than a retail tune-up between skiing vacations, the stakes are high -- if not for Questrom himself, then certainly for Barneys.
The Pressman sons, who had served as co-executives, had been muscled into one-year "consulting" positions. Gene Pressman, who recently assumed a contributing-editor position at Vanity Fair, describes his present relationship with the company as "mellow." Brother Bob is applying his well-known accounting methods at Newmark Retail Restructuring, which provides advice for troubled real-estate companies.
Despite the shuttering of the Costa Mesa store and four off-site outlets, and the reduction of losses from $11 million to $7 million, the chain still carries a large debt load. As of May of this year, there was a revolving loan of $65 million from Citibank; another $61 million is owed to Isetan (the spurned Japanese partner from the ill-conceived Pressman-era expansion). Isetan, the landlord of the Madison Avenue, Beverly Hills, and Chicago stores, also collects $15 million in annual rent; the rent accounts for up to 7 percent of current sales in those stores, compared with the 2.8 percent a store like Neiman Marcus pays. Still, sales were up by 10 percent for the first half of this year.
Though he's only been in charge for six months, when Allen Questrom speaks of Barneys, he uses the familial "we" utterly comfortably, invoking a stepfather who's so secure in his authority that the family's dysfunctional past is forgotten or forgiven. A longtime friend of Questrom's, Loews CEO Laurence Tisch, believes it's a perfect marriage of merchant and store: "Barneys is where Allen should be. He is a first-class businessman, and his native ability will make it succeed."