Barneys settles racial profiling probe for $525K

Barneys New York, which has served New York City's fashionistas since 1923, has agreed to pay a $525,000 penalty to settle claims that it mistreated African-American customers by subjecting them to unwarranted scrutiny and falsely accusing them of committing crimes.

The agreement between the retailer and New York State Attorney General Eric Schneiderman comes after a 9-month long investigation after two African-American shoppers complained they were falsely accused of credit card fraud after making purchases at the trendy Manhattan retailer. According to Schneiderman's office, the probe found that a disproportionate number of black and Latino shoppers were accused of shoplifting and credit card fraud by Barneys security staff.

Store detectives hassled sales associates so much about credit card use by minority customers that some wouldn't serve them in to order to avoid the aggravation, Schneiderman's office said in a press release. Barneys security staff also followed minority customers in the story even when associates identified them as frequent patrons.

"This agreement will correct a number of wrongs, both by fixing past policies and by monitoring the actions of Barneys and its employees to make sure that past mistakes are not repeated," Schneiderman said.

In a press release, CEO Mike Lee said the retailer was "pleased" to have reached the agreement with Schneiderman, saying it was "truly a progressive company" with "absolutely no tolerance for discrimination of any kind."

"During the entirety of our 90-year history, Barneys New York has prided itself on providing an unparalleled customer experience to every person that comes into contact with our brand -- open and welcoming to one and all," he said.

Under the terms of the agreement, Barneys has agreed to hire a consultant with expertise in preventing racial profiling in investigating criminal activity in its store. The retailer will develop and implement new anti-profiling policies for sales and loss prevention employees. Security staff will also need to track investigations, detentions and false stops because of new record-keeping requirements. Customer complaints of profiling will also need to be investigated.

When these allegations were first publicized last year, the retailer hired San Francisco attorney Michael Yaki, who serves on the U.S. Commission on Civil Rights, to review its policies and procedures. The store also reached out to community leaders such as the Rev. Al Sharpton, who met with Lee to discuss the allegations.

The negative publicity surrounding the racial profiling complaints has been a headache for the iconic retailer and repairing its reputation will take time.

Barneys' Facebook page shows a picture of an African-American model wearing a Valentino handbag that retails for $2,445. The symbolism was apparent to one user, who noted "Oh look...they used a black. Still not giving Barney's a cent. Racists."

Rapper Jay-Z came came under pressure from fans to drop plans to collaborate with Barneys on a holiday collection. Sharpton's National Action Network threatened to picket the store if the racial profiling didn't stop. In a statement, Sharpton said his organization would hire "spot checkers" to make sure that the retailer is keeping its promises to put a stop to racial profiling.

"We are glad that the settlement with the Attorney General has been achieved," said Sharpton, who also hosts MSNBC's "Politics Nation." "It is another move in the right direction towards fairness and equal respect for all consumers, but we must monitor and continue to be vigilant. "