Barneys has endured a mess of financial difficulties this year. They, like every other high-end department store, lost a bunch of money. They weren't paying bills on time, forcing parent company Istithmar, despite its own financial woes, to pump $25 million into the chain. But last month billionaire Ron Burkle purchased a chunk of Barneys's debt, which was seen as a long-term vote of confidence in all that Barneys has to offer even though he got it for 60 cents on the dollar. Same-store sales were up 7 percent in October, and bill collectors now say things like, “Barneys is paying us beautifully." So there could be no better time to make a plan to open a new store in the city in the next five years. Sources close to the situation say Barneys has its eye on Atlantic Avenue in Cobble Hill, Brooklyn, for a new Co-Op outpost. As typically happens when someone makes the first, supposedly terrifying leap from Manhattan to Brooklyn, there are naysayers, like this guy:
“They have to be careful,” says Michael Appel, president of retail consulting firm Quest Turnaround Advisors. “I don't know if there are enough of those high-end luxury-forward customers out there.”
Yet there are also supporters! The people who know someone's social life and the World won't collapse if they make the leap to Brooklyn:
“Brooklyn is a logical move for them,” says Laura Pomerantz, a principal at PBS Realty.
She may be a commission-hungry realtor, but she's right. Because if the recession has taught us anything, it's that when times get tough those "high-end luxury-forward customers" can't be counted on. Plus as Real Housewives fashion-forward power couple Silex proved long ago, there are luxury-hungry, St. Barths–gallivanting people living in Brooklyn who happily pay full retail prices wherever they are, possibly to make up for their insecurities about living in Brooklyn.
Making book on Barneys [Crain's]
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