Jewellery (jewelry)

By David Moin Barneys New York has double trouble ? losing its chief executive while struggling to get its expansion strategy on track in a tough U.S. economy.

The retailer’s chief executive officer, Howard Socol, is expected to retire soon, about a year ahead of his original timetable. Finding a seasoned successor to guide the luxury retailer isn’t expected to be easy, with no obvious inside candidate and a very shallow talent pool outside.

Sources said Monday Socol, 62, has been growing impatient with Istithmar, an investment arm of the Dubai government, because it has been encroaching on the managerial independence he’s been used to at Barneys and other companies he’s run. “He’s kind of had it,” said a retail source.

Istithmar bought Barneys for $942 million last year from Jones New York. The fund is widely considered to have paid a high price for a brand with limited portability due to its cutting-edge image. Jones bought the business for just under $400 million a few years earlier.”Expansion overseas is not easy. You can have the same box, but you can?t have the same merchandise matrix.” ? Enrico Morra, Piazza SempioneIstithmar bought Barneys at the peak of the market, beating out Link Theory Holdings of Tokyo in a bidding battle. Observers said the price represents Socol’s success in building up the retailer’s reputation.

At the time of the acquisition, Istithmar executives told WWD that overseas expansion, while possible, wasn’t a priority because the fund saw plenty of potential to grow in the U.S. Since then, however, the American economy has gone into a tailspin, with weakness in major markets where Barneys has planted new stores, including Las Vegas and San Francisco.

Any new ceo will have to contend with the poor U.S. retail scene, as well as working with a team closely associated with Socol.

Barneys has been curiously quiet, with no official announcement having been made to confirm Socol’s imminent departure, which was reported by The New York Times Saturday. Nonetheless, the report has sparked speculation as to who can fill Socol’s shoes. No one inside the company has been groomed as a successor, a shortcoming on management’s part. Barneys is strong on seasoned buyers, but not deep with manager types.

Outside Barneys, those likely to be checked out first are executives with luxury experience including Burberry’s U.S. president Eugenia Ulasewicz; Ron Frasch, president and chief merchandising officer at Saks Fifth Avenue; Jim Gold, president of Bergdorf Goodman; Karen Katz, president of the Neiman Marcus Stores; Caryn Lerner, president of Holt Renfrew in Canada, or Jane Shepherdson, Topshop’s former chief. Certain candidates could be restricted by non-compete clauses in their employment contracts.
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