06: Q&A with a former Barneys Beauty Buyer
How did this once thriving oasis for luxury, niche beauty lose its luster and end up in bankruptcy?
The beauty retail landscape has changed drastically. At the start of 2020, luxury department stores, once the launch pad of high-end beauty brands, shuttered. The closure of Barneys, the once thriving mecca of luxury acclaimed for their ability to curate the next big ‘it’ brands, hit hardest. After we posted about Barneys living on in name only as a skincare brand, our nostalgia for the golden years of Barneys brought us in contact with a former buyer in Barneys’ formerly-acclaimed beauty department. We’ve kept the interview subject anonymous due to subject matter, and edited for clarity.
How did you get into your job at Barneys?
I actually worked in merchandising for a beauty retailer out of college, and from there worked in managing wholesale accounts for a national beauty brand. Then I saw an opening at Barneys, and jumped on it!
What was the Barneys beauty department like when you worked there?
I really believe we had the best team, and they taught us to really look for the potential and find the “x factor.” We would work so closely with brands, and offer genuine feedback if something wasn’t a particular fit. For example, I remember when Vicky Tsai first walked Tatcha into Barneys. From the first visit, you could just tell everything from their branding to product prototypes were just stellar. We advised them to launch with something in the eye category, which always does well with the Barneys customer. They listened, and we were their launch partner.
What made the Barneys beauty curation unique?
We weren’t afraid of being different, and that’s why we were often the first to market with several brands that are now more mainstream like Chantecaille, and Sunday Riley. Although we were considered among the greats as far as luxury department stores go, we really had a forward vision more in line with an apothecary.
Also at the time, being in Barneys really meant something. Not luxury for the sake of luxury, but a stamp of approval that something really stood out. And that made us the most desired launching pad.
I remember when Sunday Riley first launched, the glass bottles of different serums felt out of this world. But that brand has changed so much, today it’s almost unrecognizable from how it debuted.
Yes! It’s so sad! Now they’re so down market compared to what they were initially!
Is it because of Sephora?
Sephora, and the overall industry. Barneys really invests in personal experiences, and Sephora is in the business of volume. When I was on my way out, margins were increasing so much and terms were increasingly aggressive. A brand that would get paid in 30 days, suddenly had to manage with not getting paid until next quarter. The result of this is cost cutting. When Sunday Riley made their way to Sephora, there was kind of a pause for a while. Then suddenly their beautiful glass bottles were getting changed out and you saw more plastic in their packaging. The $200+ serums got edited out for cartoony tubes of colorful cream. The line today is really different in quality and vision from what they set out to be.
What is the draw for brands to go this route?
Volume! Brands will do anything for volume, because all anyone cares about for success is growth.
Were these the primary reasons Barneys was not able to keep up?
A frustration I had was cultivating these great brands, often even advising on design and marketing campaigns. And then when the brands are successful, they run off to a Sephora for volume. Of course, I don’t blame them for wanting to grow. But most of the time they lose their luster, and stop making products that served our customer. So it was a continuous task of discovering and cultivating the next thing, and knowing that there was a shelf life for my efforts.
Barneys really was made to be the example of a business that didn’t survive the pandemic since it tapped out at the beginning. But I don’t think anyone did particularly well during the pandemic.
I know no one did well! But all you ever read from brands was “business is multiplying in our direct-to-customer!” I know that’s bullshit. Retailers were all struggling, everything was sluggish. No one was onboarding more brands. And brands who used to get beat up by retail margins, are now being beaten up by ad purchase expenses. It’s all smoke and mirrors, of course the spokesperson or founder is going to say things are going well. Then a year later, they’re on another feature saying “there was so much uncertainty, but now we can be more optimistic,” why weren’t you optimistic during the uncertainty if things were really going that well?
Do you think the brands that are still playing in retail today have to work with those outsized margins? And what does that mean for the end-customer?
I know they are because I still get brand founders complaining to me about it. Some retailers take around a 70% margin, and force the brands to eat expenses like returns, shipping, marketing costs. If the brand has a distributor, that’s another margin on top of it. So if they sell a $100 product, they’re getting chump change. The buck has to be passed somewhere, and usually it’s passed to the customer who pays for it. That’s why you’re getting $100 cleansers, and face oils going close to $200. If you’re really looking for value, those brands are probably not sitting the shelves of your beauty store. Not saying they aren’t good, most of the stuff I use can be found there, but you’re mostly paying for the margins.
How much should face oils cost?
A good good face oil, like best of the best, organic, precious mermaid energy, should cost $100 for 1 ounce. That’s just if we’re talking about a blend of plain oils. If there is anything more serious in it like a Vitamin C, acid, retinol, or some other active, $150 tops.
How do you feel about DTC (Direct-to-consumer)?
Overrated. I get that brands are tired of the one-sided relationships with retailers, but it’s a bit of assuming the grass is greener. What you’re saving from those margins are negated by how much you pay to acquire customers since you basically have no platform. Better the devil you know.
What are some brands today that would have been a hit with Barneys?
Augustinus Bader, Victoria Beckham Beauty, Hanacure, Vyrao, U Beauty. Super Egg is pretty interesting.
What do they do right?
They have a good mix of innovation, luxury, uniqueness, marketability, and a compelling founder.
We’re left with retail being untenable with their terms, and DTC not the solution people thought it was. Where do you see this going?
I think this might be cyclical. Everyone seems tired of growth for the sake of growth, it’s just not delivering quality.
Unless they’re venture-backed. Then they’re all about growth because their performance all comes down to metrics and targets.
Beauty can’t be all business, and bottom line. Someone is going to come along again, and find those really incredible brands that don’t fit the mold. And they’re going to change everything again.
Disclaimer: Analysis, by nature, may be speculative, and should not be taken as fact. Views and opinion expressed are just that, and should not be taken as endorsements, nor advice (financial or otherwise).
Disclosures: Newsletter may use affiliate links. Underneath It All is run by Garçon’s Media, which is not a shareholder of any beauty company, nor vice versa.