Simon Doonan, famous for creating naughty yuletide window displays of Margaret Thatcher (as a dowdy dominatrix) and Madonna (not the holy one), has a new stage on which to present his brand of mistletoe mischief: he is decorating the White House for Christmas.

Mr. Doonan, the creative director of Barneys New York and a tart-tongued columnist in The New York Observer, was selected several months ago to organize this year's public displays for the holidays, the Obamas' first in the White House, according to a person familiar with the planning.

While the White House wouldn't confirm the choice, several volunteers and florists were gathered at the presidential mansion to begin installing the annual displays over the weekend, after the White House Christmas tree, a Douglas fir from Shepherdstown, W.Va., arrived there on Friday.

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Details surrounding this year's decorations have been under tight wraps, but they are expected to include a selection of artworks by children. Certainly, they will be less controversial than Mr. Doonan's displays for Barneys for more than two decades, which have alternatively fascinated and horrified holiday shoppers. Past themes have included hippies, Sigmund Freud, Warhol, celebrities on Vanity Fair covers. At least one American politician. Dan Quayle, in a display in the 1990s, was depicted as a ventriloquist's dummy.

Barneys took on debts of about $500 million to fund the purchase. Since then, economic woes have crimped Barneys' sales, and it has been without a CEO for the past 18 months.

Istithmar now is exploring a possible Barneys restructuring, with the retailer tapping investment bank Perella Weinberg Partners to advise it. One approach typically taken in such situations is to wipe out company equity, while delivering control to debtholders.

Hedge-fund manager Richard Perry is expected to be the key player in any negotiations; his hedge fund holds a controlling position in Barneys' senior debt. "There are conversations, but no process," said one person familiar with the matter, adding not to "expect anything imminent."

When I got to Barneys, I was welcomed with the news that our Rocco bag had a waiting list of 400-plus. By day's end, their entire Spring 2010 handbag order sold out with pre-buys-and that's before it will even hit the floor. Yikes! Good news, but now we're going to have to figure out how to produce more bags so our section won't be empty come January.

Now Barneys is moving to further ease the financial pressure, tackling a 500-pound gorilla. On Tuesday, Perella Weinberg Partners, an asset management company, was hired to help restructure the retailer's debt. On the books, there is about $500 million in long-term debt, including a $270 million term loan maturing in 2014 and a mezzanine loan of about $230 million maturing in mid-2016. There also is revolving credit debt, which, based on available working capital, varies from month to month and matures in 2012. The balance is currently $80 million. Barneys' lead banks are Citibank, Wells Fargo and HSBC.

Interest costs, depreciation and sales declines put Barneys in the red last year on a net basis, though the chain made money on an earnings before interest, taxes, depreciation and amortization basis. As for 2009, the company, with seven flagships, two regional stores, 19 Co-ops, 13 outlets and three warehouse sale locations, is projected to reach sales of about $675 million, down from $750 million last year, but generate a small operating profit.

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Like other retailers, particularly those purveying luxury, Barneys has been deeply impacted by the recession. However, the store's current management structure — without a chairman, ceo or chief operating officer — makes it unique. Instead, a senior operating committee, comprising the chain's seven executive vice presidents, is running the show. They represent the top tier inside the chain and are all veterans of the organization, with anywhere from 13 to 30 years' tenure. The committee meets weekly, usually Tuesday mornings, in the 11th-floor conference room at Barneys headquarters at 575 Fifth Avenue in New York, to tackle anything from cost cutting, sales trends and merchandise receipts to advertising or when to break into sale mode. A formal agenda for each meeting is prepared by the chief financial officer with input from the other executives. After going through the agenda, each executive vice president can bring up any significant matter pertaining to his or her area of responsibility.

"It's distasteful," said Angie Lobo, 50, of Woodside, Queens, who made a face when she noticed the window while shopping with her daughter. "I was just thinking, 'What's the point?'"

The windows, in a vestibule along E. 61st St., appeared blood-splattered and included white mannequins - wearing long black dresses by Helmut Lang and A.L.C. - in poses that suggested they were fending off assailants.

"What the heck?" asked Sarah Elizabeth, 25, of Hartford. "I think it's a little crazy. Did she fall off the chair and hit her head? Is that blood?"

One is the 85,000-square-foot store at the Shoppes at the Palazzo in Las Vegas, owned by real estate operator General Growth Properties Inc., the people said. Barneys is the anchor tenant in the $1.9 billion retail-entertainment complex on the Las Vegas strip that opened last year and features boutiques from tony brands such as Christian Louboutin and restaurants run by celebrity chefs.

Barneys had expected to generate $6 million a month in sales at the store, but since last fall the company has eke out about a quarter of that, one person familiar with the issue said. Neither Istithmar World, which owns the retailer, nor Barneys replied to requests for comment.

"The mall is beautiful, but you just can't shop it," said Matt Bear, principal of EndCap Real Estate Advisors in Las Vegas. "The layout is strange," making Barneys hard to find. Surrounding luxury boutiques are also cannibalizing Barneys' sales, he said.

Launching this fall in Barneys' flagship locations and aptly named Exclusive, the collection will be presented alongside the mainline Paul Smith collection and replace the London Collection the retailer previously carried. Exclusive will reflect the natty and whimsical Paul Smith aesthetic but with a narrower focus on modern tailoring.

"The Exclusive collection complements the runway collection," said Tom Kalenderian, Barneys general merchandise manager for men's. "It leaves room for the runway collection to be more experimental and trend-based."

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Suits will be priced at $1,400 to $1,750, which is approximately 20 percent lower than the signature collection. Sport coats will be $1,250 to $1,500 — also a 20 percent difference. And shirts will be $250 to $350, which is 30 percent below signature.

The 90,000-square-foot structure at 15 East Oak Street, complete with a penthouse-style Fred's restaurant, replaces Barneys' former 52,000-square-foot store across the street at 25 East Oak Street in Chicago's upscale Gold Coast area.

Despite the economy, "no one at Barneys has any reservations about Chicago," said Simon Doonan, the retailer's creative director, who noted strong sales figures developed quickly at the original Windy City store, which opened in 1992. "Some of the other stores have taken a while for it to stick. Right off the bat, sales were really strong in Chicago."

On Tuesday, David Jackson, chief executive officer of Istithmar World Capital, the parent of Barneys, told WWD that Chicago was one of Barneys' top-performing locations. "It was doing an disproportionate amount of business for that square footage. Now is a tough time for an expansion," he admitted, "but we still believe in the Chicago market, long term."

"I believe Barneys was strong enough to survive without the support, but because vendors and factors were nervous we elected to put some more capital in to help decrease their level of concern," David Jackson, chief executive officer of Istithmar World Capital, the parent of Barneys, told WWD.

Jackson would not confirm the $25 million report, but he did characterize the level of support as "significant," adding, "In this environment, where everybody is hoarding cash, we are trying to send a signal that we are supporting the business."

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Earlier, Jackson released a statement that, "Istithmar World Capital has provided a significant level of additional capital to support Barneys New York. Working closely with management, we believe that this amount allows the company financial flexibility to work with the company's major vendors and financial intermediaries. The plan enables the company to meet its 2009 schedule of shipments. We will continue to monitor the company's performance but we are confident that no further injection is needed at this time."

Tactics range from standard trunk shows and giveaways to temporary stores and limited edition products to break through what executives describe as a psychological barrier to discretionary spending. "There are still people with money, but we have to talk to them differently," said Valerie Hermann, chief executive officer at Yves Saint Laurent. "It's about having a relationship with them directly. It's not only sending them catalogues."

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For example, next month at Barneys New York, YSL will unveil a "new vintage" collection of iconic styles made of fabrics "recycled" from its inventories. And in June, in tandem with YSL parent PPR's release of the documentary film "Home" on World Environment Day June 5, the French house plans to create special products and give away free copies of the Yann Arthus-Bertrand movie on DVD. Ferragamo ceo Michele Norsa said six months ago he decided to shift a portion of marketing investments to in-store events to generate consumer interest, especially in this economic phase.

"I think one must be creative when it comes to attracting consumers who are inundated with invites and are used to wine-and-cheese cocktails, using the brain more than the wallet," he said. "It's important to tie oneself to cultural events, to charities, to link the brand to celebrities or to important events such as [Milan's] Salone del Mobile," which takes place later this month.