Barneys' new team, from left: Simon Doonan, Charlotte Blechman, Amanda Brooks, Dennis Freedman, Mark Lee, Daniella Vitale, Tom Kalenderian.    (Photo: Jason Schmidt)

The ground floor at Barneys on Madison Avenue has always been a magical, twinkling place. It is reached via a great big door that revolves with a seemingly limitless flow of glossy hair and glossy skin and glossy nails and very expensive leather in the form of handbags and shoes.

Everywhere there are antique vitrines filled with striped Japanese socks, or gumball-size rubies direct from Jaipur, or watches from Hermès, or stacks of cashmere shawls so fine they could fit through any number of the diamond pavé rings that are displayed on either side of the door. There are vintage rose-gold earrings from Spain and there are elegant briefcases from a family-owned company in Milan.

It’s one of the places people go to celebrate something New York and big, like a promotion or an opening on Broadway or the closing of a major deal. It is also a place people go when they are rich enough not to need a special occasion to celebrate, or when they want to treat themselves to a pair of shoes (on sale or not)—or simply to a chopped chicken salad at Fred’s, the restaurant on the ninth floor where the patrons enact a version of New York life that is usually restricted to romantic comedies. As Sarah Jessica Parker once said: “If you’re a nice person and you work hard, you get to go shopping at Barneys.”

But like many of its clients, Barneys—founded by Barney Pressman in 1923—has had its ups, its downs, and its great many in-betweens, and it is, at right this very moment, engaged in that most New York of pursuits: a reinvention.

In 2007, the entire Barneys chain—six Barneys stores in the U.S., plus fifteen Barneys ­Co-Ops, which target a younger client with a smaller budget—was bought by Dubai’s ­Istithmar World for $942 million, including around $500 million in long-term debt. In 2008, Barneys CEO Howard Socol resigned, and the whole operation trundled along for several years without anyone in the top job.

But then, last summer, Mark Lee was hired as Barneys’ new CEO. Lee is a slim man with a trim haircut and a wardrobe of very well-made suits. His reputation is as golden as it gets in the fashion world: He’s spent his career in Europe occupying high-level positions at important fashion houses—­Armani, Yves Saint Laurent, and, most recently, Gucci, where revenues went up 46 percent during his three and a half years as CEO. Lee is very much a businessman, but he’s the kind of businessman with taste: He was an early proponent of Stefano Pilati, now chief designer at YSL, for example. As Simon Doonan, who has worked at Barneys for 25 years as everything from spokesman to window dresser to general creative mastermind, puts it, “Mark Lee is very modern. He’s a very forward-thinking dude.”

Lee resigned from Gucci in 2008 and was enjoying a sort of quasi-retirement back in New York comprising Pilates, home renovation, and corporate boards (Tory Burch, Yoox). His longtime partner, Ed Filipowski, who is the co-president of the fashion-PR juggernaut KCD, lives here, and so do the couple’s two beagles. Lee, quite simply, wanted to come home. “I don’t mean to sound terrible,” he says, “but I’d worked for all of these great European brands, and there just weren’t American brands that I felt excited about.” But Barneys had always been on his list of dream jobs. He was offered a position there 25 years ago by Gene Pressman, grandson of the store’s namesake. That offer was made on a Friday, and when Lee asked for the weekend to think it over, it was rescinded. “Gene thought that if I was passionate about it, I would have accepted on the spot,” Lee says over lunch one day at Fred’s (named for Fred Pressman, Gene’s father). He slices his chicken Milanese into neat little bites. “So I suppose this is what Oprah would call a full-circle moment.”

A lot has changed since that long-ago offer. In these crazy economic times, the very highest end of things has remained very much up, particularly in places like China, but with global expansion has come a dilution of what luxury used to mean. Even at home, among all the Real Housewives, a name brand and a big price tag are no longer enough to qualify an item as exclusive. And now there’s the economy’s latest churn. “The 24-hour news cycle tends to play on the psyche of the customer,” Lee said last week. “It’s important we stay fine-tuned to the situation. We are always competing. Luxury customers are still shopping, but they are very thoughtful about purchases.” And presumably, they want something that the Jill Zarins of the world haven’t got. For Lee, this is the key to the success of the new Barneys. “The bigger luxury brands get,” he says, “the more that gives meaning to Barneys.” In order to attract the kind of customer Barneys is after, the kind of customer who helped make the store the cultural fetish that it is, Barneys has to concoct a universe in which expensive product is even more special, unique, worth it.