Following weeks of rumours about its impending demise, the luxury department store Barneys New York filed for bankruptcy protection on Monday. Due to increased rent costs, growing competition, shoppers’ changing habits and lower sales figures, the retailer has been suffering for some time now.
After filing for Chapter 11 bankruptcy protection, Barneys has been forced to announce the closing of 15 of its 22 stores, including locations in Chicago, Las Vegas and Seattle. Five of its flagship locations will remain open, including the two stores in Manhattan as well as those in Beverly Hills, San Francisco and Boston. Two other outlets that will remain open are Barneys Warehouse locations in Central Valley, New York and Livermore, California. Meanwhile, Barneys.com will also remain in operation for online customers.
It’s estimated that Barneys has racked up liabilities of anywhere from US$100 to $500 million (HK$783 million to HK$3.9 billion). As it begins to restructure the business, the legendary retail institution has taken out a US$75 million loan in hopes of buying some time to find a buyer to salvage the Barneys name. Chief Executive Daniella Vitale commented that the bankruptcy protection “will provide the company the necessary tools to conduct a sale process, review our current leases and optimise our operations.”
Barneys New York came from humble beginnings, starting out as a men’s discount store on Seventh Avenue in 1923. Founder Barney Pressman pawned his wife’s engagement ring to fund the opening of the 500-square-foot shop. By the 1960s, Barney’s son Fred stepped in and transitioned the destination for deals into luxury with the help of friends Hubert de Givenchy and Pierre Cardin.
Younger brothers Gene and Bob joined the family business in the ’70s and brought on women’s designer clothing, mainly from Europe, including Giorgio Armani. With fashion and music icons like Madonna, Naomi Campbell and Christy Turlington, the brand then catapulted into legendary status in the late ’80s. Bt the turn of the century, Barneys locations had opened all across the US.
This isn’t the first time Barneys has been in bankruptcy, having filed for it once before in 1996, but we’ll just have to wait and see what happens next for the legendary luxury department store.