Beauty Inc Newsletter: What Barneys’ Demise Means for Beauty

Byredo. Le Labo. Hourglass. Editions de Parfum Frédéric Malle. Westman Atelier. By Terry. Sunday Riley. Lipstick Queen.
The list of beauty brands that first saw the light of retail via Barneys New York reads like a greatest hits roster of Indies that changed the industry.
Now, a week after the "Everything Must Be Sold!" signs have come down and Barneys' doors have shuttered for good, the beauty ecosystem is asking who, if anyone, can fill the void left by the store's closing.
"What was so special about Barneys was it was an incubator of brands," said Bettina O'Neill, who oversaw beauty there for 16 years as vice president and divisional merchandise manager and is today the vice president of sales and education at The Harmonist. "I had a quote on my wall — 'select, don't settle.' It wasn't a me-too store where we had everything for everybody. We were willing to take risks."
That meant nurturing a brand in all aspects of its development, from giving it time to build a business (even if that meant a year) to advising on everything from packaging to pricing. Moreover, with multiple locations around the U.S., Barneys was a way for brands to gain national exposure without a huge expenditure. That is going to be more challenging for brands to replicate.
"The discovery brands have lost an important entry point," said Sandi Burrows, whose namesake company discovered and built multiple brands at Barneys including L'Artisan Parfumeur, Byredo, Serge Lutens and Aesop. "It's very difficult for them now — you can't go to the existing bigger retailers without much deeper pockets to get something started and that takes a level of investment that wasn't required before. You need to be able to go in and produce a certain volume quickly."
While retailers like Saks Fifth Avenue, Neiman Marcus and Nordstrom all have thriving businesses with niche brands, such brands are usually brought into the store once they've established a certain sales volume. These retailers are not as agile when it comes to developing brands, say multiple sources. "There are retailers with a national presence that want niche brands, but maybe not on Day One," said Veronique Gabai, the former chief executive officer of Vera Wang and Estée Lauder executive whose eponymous fragrance line launched at Barneys last fall. "They will do it on Day Two, when the introductory work has been done.
"For those of us starting businesses, there is still a path to growth," continued Gabai. "What is more difficult to figure out is this inception moment, where you need to plant the seed."
For her part, Gabai is building up her e-commerce platform and has lined up anchor stores in key cities around the world, such as Bergdorf Goodman in New York and Liberty in London.
Other retailers that are considered effective launchpads are The Conservatory, a multicategory store opened by former Forty Five Ten owner Brian Bolke with outposts in New York and Dallas; Miami-based The Webster; Net-a-porter, and Violet Grey in Los Angeles.
But the path to growth is very different. "Barneys played a fantastic role in the curation of exciting new brands, but times have changed," said Carol Hamilton, group president of acquisitions at L'Oréal USA. "There are so many more platforms where consumers are discovering new brands, whether it's retail or social media."
Gabai is also looking at nontraditional distribution options that are complementary to her brand's positioning, like the Hotel du Cap-Eden-Roc in Antibes and the Ritz in Paris. "I'm looking for places where the first adopters are, then little by little you widen the circle around the core," she said.
Burrows is advising clients to build strong storytelling platforms digitally while simultaneously growing e-commerce and then slowly rolling out to select retailers to expand visibility. So for the direct-to-consumer brand Deodoc, an upscale feminine care line developed by two dermatologist sisters, Burrows' first point of sale IRL was Violet Grey, which has a robust Sexual Health and Feminine Care category online and in its Melrose Place boutique. To drive awareness, co-founder Hedieh Asadi is developing educational videos for the retailer and is slated to be on a CEW panel with Cassandra Grey and other female founders.
"We're building visibility and then picking very carefully who else we talk to," said Burrows. "It requires a lot of patience. Making a wrong choice can be very damaging in the long term."
Serial beauty entrepreneur Poppy King is taking an opposite approach. She launched her first namesake lipstick brand in Barneys in the early Nineties, and her second, Lipstick Queen, debuted there in 2006. Now readying her third brand, Femme de Poppy, she's doing a complete 360 and launching on QVC.
"Instead of starting niche and going more mass, the model today is to start mass and go niche," said King. "The landscape today is dominated by direct-to-consumer. Even if you're in a retailer, the conversation you have with your customer is so important. Whether or not your model is literally DTC, if you're a brand — you're a DTC brand."
Being able to tell the story of the brand is essential, which has become increasingly difficult in a crowded store environment — no matter how posh it may be. "There is so much noise pollution, so much information coming at us so quickly," said King. "A story is something you have to sit down and listen to. If you had told me a year ago that my exclusive relationship would be QVC and not Barneys, I would have said I don't know about that. But QVC is such an egalitarian platform and I'm excited to move the needle in terms of what is offered there."
Of course, as the saying goes, when one door closes, another opens — and some retailers like Cos Bar are looking to step through the entry left by the demise of Barneys. "We've seen a lift in brands that were primary trade partners with Barneys and had limited distribution," said copresident Oliver Garfield, citing Chantecaille, Serge Lutens, Zelens and Westman Atelier as examples. But the store is looking to fill much more than a sales void. "For us," said Garfield, "it's the realization that for the more developing brands, we can be more hands-on in terms of helping them succeed and being a true partner in that capacity."
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