Barneys New York exploring options including bankruptcy filing

Historic US department store Barneys New York has appointed strategic advisers to investigate future options for the business, including bankruptcy filing.

According to Reuters, the upscale retailer has appointed law firm Kirkland & Ellis LLP, which is looking for solutions to the challenges faced by Barneys, including high rents. A source told the international news service that a bankruptcy filing is just one option being considered and is not a foregone conclusion.

Its flagship store on Madison Avenue (pictured above) is said to carry a particularly high rent, which is dragging on the company's finances.

In a statement, the company said: “At Barneys New York, our customers remain our top priority and we are committed to providing them the excellent services, products, and experiences they have come to expect.

“We continue to work closely with all of our business partners to achieve the goals we’ve set together and maximize value. To that end, our board and management are actively evaluating opportunities to strengthen our balance sheet and ensure the sustainable, long-term growth and success of our business.”

The story will strike a familiar tone with retailers on this side of the Atlantic. Two of the UK's best known department stores have faced considerable strife in recent years. Last year House of Fraser was placed into administration and acquired by Mike Ashley's Sports Direct while Debenhams too was placed into administration to be bought by a consortium of its investors. It then entered into a CVA arrangement to enable it to reduce rents and close stores.

High-end department stores, such as Selfridges, Harvey Nicholas and Harrods, have all fared far better here but do not have large numbers of stores to content with (Selfridges has four stores in the UK, Harvey Nichols has eight in the UK and Republic of Ireland, while Harrods has just its Knightsbridge store and an outlet at Heathrow T5).

Barneys, which was founded in New York almost 100 years ago, has 22 stores, some of which are outlets. The business was founded in 1923 when Barney Pressman pawned his wife's engagement ring to open a menswear store on Seventh Avenue.

The business, which traded under the slogan "No Bunk, No Junk, No Imitations", gained a reputation for its irreverent marketing, which prevails to this day.

While it began as a discount store, Pressman's son Fred repositioned it as a luxury destination in the 1960s. Fred Pressman's sons, Gene and Bob, launched womenswear in the 1970s and the store gained a reputation for bringing exciting new designers, such as Giorgio Armani, to the US for the first time.

The Peter Marino-designed flagship on Madison Avenue was opened in the 1990s.