The emerging international customers from Eastern Europe, India and China are making a huge impact and make up an enormous market for spending, Telsey noted. "The luxury market totaled $150 billion worldwide annually in sales. It is expected to grow 6 to 7 percent annually for the next five years."

She noted Barneys has cachet merchandise and name-brand awareness. In the U.S., its flagships will work best in a market with good tourist traffic and wealthy demographics, she concluded.

Frederick Schmitt, an investment banker at the Sage Group, believes the contemporary market is still very strong. "Based on demographics, there's a lot of very wealthy people out there and we don't see that changing. The demographic trends support continued growth."

Schmitt noted Baby Boomers and younger generations tend not to be attracted to department stores, which is why specialty chains have been growing very quickly, and Barneys fits the age demographic. "Baby Boomers and those younger are more willing to spend money on apparel and accessories than their parents," he said.

Analyst Jennifer Black of the firm that bears her name said the changing demographics are such that offerings in contemporary and premium denim will continue to be must-have items.

"The ones that can afford it don't want to look frumpy. They're not going back to moderates. All Boomers want to look younger," she said. — With contributions from Lisa Lockwood, Whitney Beckett and Jeanine Poggi