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How Barneys Warehouse Is Growing Online

Now that the site is finally accepting returns (!), it's poised to compete with other off-price designer retailers.

For more than 30 years, the biannual Barneys warehouse sale in Chelsea was the stuff of shopping legends. Borderline iconic in the realm of New York retail, they drew lines that wrapped around the block long before Supreme and Kanye West did. Among in-the-know New Yorkers, it was like an end-of-summer social event, with countless conversations surrounding not whether you were going to go, but what you bought and for how much. But at some point, Barneys had to get with the times and in 2013, it took its Warehouse concept online, officially doing away with the brick-and-mortar version of the sale last year; though it does operate 10 permanent Warehouse stores across the country, primarily in outlet centers such as Woodbury Commons in New York.

Barneys' decision to make Warehouse permanent and give it an online home made sense: Fellow department stores Saks Fifth Avenue and Nordstrom's off-price businesses consistently outpace their full-price counterparts in terms of growth, while the Outnet has been a boon to Net-a-Porter's business. Lord & Taylor and Macy's have launched off-price stores recently as well. Plus, for Barneys, opened up its potential off-price customer base outside of NYC. Still,, with it's New York history, has always felt slightly more elevated and insider-y than its competitors, and Barneys wants to keep it that way — within reason.

Up until this week, the site did not accept returns — a policy that harkened back to its ephemeral brick-and-mortar legacy. Of course, nostalgia's not always good for business and as of this Wednesday, returns are accepted for a fee of $9.95, and with the exception of clothing items purchased on clearance and all swimwear (more info here). The Warehouse stores accept returns, too.

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"Barneys Warehouse obviously has a rich legacy and it’s something that we're proud of as a part of our brand, which I think is very different than most off-price sites," Matt Woolsey, Barneys' EVP of digital, told Fashionista over the phone Thursday. "Final sale has always been a part of the Barneys legacy dating back to the early days in Chelsea; as that business has grown online, we see returns now as an opportunity to improve the experience." He also pointed out that Warehouse is "one of the only off-price sites that already offers free shipping without a minimum."

Without breaking down the exact split for each business, Woolsey said Barneys' "whole online business has grown so quickly and Warehouse is an important part of that," noting that, altogether, e-commerce sales have grown "substantially" over the past four years. The full-price Barneys site makes up the vast majority of growth and sales. (According to Business of Fashion, Barneys is currently profitable and brought in an estimated $900 million in revenue last year, with 9 percent of that coming from Warehouse.) Though, it wouldn't be a stretch to speculate that Warehouse could start to catch up now that returns are accepted. Think about it: Would you buy a a Proenza Schouler dress (even at 50 percent off) online if you knew you couldn't return it if it didn't fit? "We're going to get a lot of new customers," said Woolsey, confidently, "so I think we will get a lot of new insights in terms of this program and thinking about how we can continue to develop and grow Warehouse."

Another way in which Warehouse has evolved is how it sources inventory: While its selection of designer clothes and accessories used to be made up purely of overstock from Barneys stores and, Woolsey confirmed they increasingly buy directly from brands in order to deliver new merchandise more frequently. "Now [that] we offer returns, I think you'll see even more velocity on the site," said Woolsey.

While we still miss the IRL sales, those hungry for some Barneys nostalgia can retreat to the new downtown New York location, which opened in February in Chelsea — right where the first-ever Barneys opened 93 years ago.

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