A Case of “Shop and Frisk’” A Notre Dame case study prepared by research assistants Christopher Cellante and Timothy Kelly under the direction of Prof. J. S. O’Rourke, IV. Copyright: 2015 By Chris Cellante and Tim Kelly

Learning Objectives Analyze how Barneys can restore its reputation by disproving allegations or reforming policies that the company engaged in racial profiling, leading to a racist culture. Examine how Barneys manages key stakeholder relations and shapes a public discussion on racial profiling and the company’s loss prevention practices. Identify theoretical considerations that inform Barney’s response strategy.

  “We are not going to live in a town where our money is considered suspect and everyone else’s money is respected.” – Reverend Al Sharpton

The Incidents: Trayon Christian

The Incidents: Kayla Phillips

Barneys Responds The company posted the following statement on Facebook, October 23, 2013: “Barneys New York typically does not comment on pending litigation. In this instance, we feel compelled to note that after carefully reviewing the incident of last April, it is clear that no employee of Barneys New York was involved in the pursuit of any action with the individual other than the sale. Barneys New York has zero tolerance for any form of discrimination and we stand by our long history in support of all human rights.”

Facebook Users React Received over 1,500 comments within the next few days. Met with outrage and disappointment. Facebook users criticized the statement for its lack of an apology. A substantial number of commenters vowed to never shop at Barneys again. “The report clearly states a clerk called it in, I know you guys have a large PR team -- you are doing it wrong to deny the facts. Fire the worker, apologize to the victim, change your policies.” “Shame shame shame...racist racist racist. I have shopped at your store for 18 loyal years...not anymore.” “You'll never see any of my money and I'll make it a mission to make sure you never see any of my friends or families either.”

CEO Mark Lee Makes a Statement Barneys posted the following statement on Facebook the next day: Barneys New York believes that no customer should have the unacceptable experience described in recent media reports, and we offer our sincere regret and deepest apologies. Further to our statement of yesterday, we want to reinforce that Barneys New York has zero tolerance for any form of discrimination. We are a strong proponent of equal rights and equal treatment for all human beings. Our mission is to ensure that all customers receive the highest-quality service—without exception. To this end, we are conducting a thorough review of our practices and procedures as they relate to these matters to ensure that they reflect our continued commitment to fairness and equality. To lead this review, we have retained a civil rights expert, Michael Yaki, who also serves on the U.S. Commission on Civil Rights. The Commission has been the nation’s watchdog for civil rights for more than 50 years. Mr. Yaki will be provided with unrestricted access to all aspects of our store operations. In addition, Barneys New York has reached out to community leaders to begin a dialogue on this important issue. Sincerely, Mark Lee CEO of Barneys New York

The NYPD Counters NYPD spokesman John McCarthy declares that, in each incident, officers were acting on information that was provided to them by store employees. McCarthy also confirms that, “[i]n both instances, the NYPD were conducting unrelated investigations” within the stores.

Public Reaction On October 30, 2013, a group of protestors gathered outside the Barneys storefront on Madison Avenue. Although only consisting of a few dozen demonstrators, these sign-toting activists wanted to deliver a message to Barneys CEO Mark Lee, giving him two days to respond.

Case Summary: Critical Issues Reputation management. Interacting with key stakeholders. Managing a successful loss prevention program. Taking action that is seen as both effective and responsive to the needs and interests of all involved. Maintaining open, honest, and clear communication. Knowing what success looks like in this case.