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How the Management Shake Up at Barney's Will Take the Snooty Out of Shopping

The New York Post (in its trademark histrionic style) is calling the management shift at Barneys "a bloodbath" thanks to the departure of three of its top merchandising execs. What it actually is, is a predictable reaction to the calculated management style of Barney's new CEO Mark Lee and the recent appointment of his former Gucci colleague Daniella Vitale to EVP and chief merchant. And it's a move that may save the store from being too snooty for all but the most savvy sartorialists.

Granted, veterans Judy Collinson (EVP/GMM Women's Merchandising), Julie Gilhart (SVP/Women's Fashion Director), and Karl Hermanns, (EVP merchandise planning, marketing, e-commerce and operations) all saw the retailer declare and emerge from bankruptcy in the late 1990s and flirt with being sold again last year. Through it all their merchandise mix has long reflected the urbane hauteur that was signature Barneys. For the fashion cognoscenti in major urban locales, it's swoon-worthy. In Dallas or Vegas - not so much.

Along comes newbie Lee with marching orders from execs at parent company Istithmar World Capital (an investment arm of the government of Dubai). Lee was ostensibly brought on board to replicate his successful turn taking Gucci from the highest peak of luxe to a slightly more downmarket (read affordable and accessible) yet much more profitable place.

No doubt Istithmar is tired of teetering on the edge of its initial 2007 investment of $950 million. It also infused Barneys with an additional (undisclosed) amount of cash to allow stores to meet their shipping schedule through the end of 2009. Rumors of a second bankruptcy and a buyout by Canadian department store Holt Renfrew never came to fruition, but billionaire investor Ron Burkle (fresh off the proxy battle with Barnes & Noble chairman Len Riggio) who took over nearly half of the retailer's debt is waiting in the wings.
No wonder the writing for a management shuffle was on the wall.

No matter how exquisite the taste level, or how many designers were discovered on their watch (think Alexander McQueen), the old regime had to go. According to WWD, Vitale does have some big shoes to fill given Collinson's reputation and decades of experience. Vitale comes in at a slight disadvantage, too, given that she's worked with one label rather than many brands at a department store.

However, Vitale's already worked with Lee and knows his management style, which will be most helpful as she'll be his direct report. And let's not forget that as president of Gucci's Americas division, she was up to her elbows in converting aspirational shoppers into customers during the recession. Through October 1, 2009, Gucci comps were up 9.9 percent and the company reported North American sales improving month after month.

It will be interesting to see what -- if anything -- will happen with Barney's flamboyant and outspoken creative director Simon Doonan. Meanwhile the march to profitability continues apace.

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