Luxury retailer Barneys files for bankruptcy after rent hit
US luxury department store chain Barneys New York filed for Chapter 11 bankruptcy yesterday and put itself up for sale, after facing soaring rents and failing in its earlier attempts to find a buyer.
Barneys has secured $75m (€67m) in new financing from affiliates of Hilco Global and the Gordon Brothers Group to help it keep operating as it navigates the bankruptcy court, it said in a statement.
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The retailer will close its physical stores in Chicago, Las Vegas and Seattle, along with five smaller concept stores and seven Barneys Warehouse locations. Barneys for weeks has been searching for a buyer or an investor, grappling with a crisis due to a steep hike in rent at its Manhattan flagship store on Madison Avenue to roughly $30m, from $16m.
That comes on top of pressure from online retailers who have emerged with the rise of Amazon, and pushed an abundance of traditional bricks-and-mortar retailers to the brink.
However, its Madison Avenue store will stay open, along with its other four flagship locations, Barneys said.
"The Barneys New York board and management team have taken decisive action by entering into a court-supervised process, which will provide the company the necessary tools to conduct a sale process, review our current leases and optimise our operations," said CEO Daniella Vitale.
The 'New York Times' reported multiple parties had expressed interest in the firm and one offer fell through due to a lack of time.