Iconic US department store Barneys files for bankruptcy
Barneys New York, the upscale US department store chain, has filed for bankruptcy protection and will close all but five of its 22 stores.
The business has secured $75m from restructuring firm Hilco to keep it afloat while it goes through the bankruptcy process, closes the stores and seeks a buyer.
Barneys cited soaring rents at its Manhattan flagship store on Madison Avenue, where rent had almost doubled from $16m to $30m, and the migration of shoppers to online as major causes of its woes.
The business said in a statement that the shops to be closed are in Chicago, Las Vegas and Seattle, five small concept stores and seven Barneys Warehouse stores.
Five flagship locations are expected to stay open: two New York locations (Madison Avenue and Downtown New York City), two in California (Beverly Hills and San Francisco) and the Boston store. Its website will continue to trade.
Daniella Vitale, CEO and president, said: "For more than 90 years, Barneys New York has been an iconic luxury specialty retailer, renowned for its edit, strong point of view, creativity and representation of the world's best designers and brands.
"Like many in our industry, Barneys New York's financial position has been dramatically impacted by the challenging retail environment and rent structures that are excessively high relative to market demand.
"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."
Barneys was founded in 1923 when Barney Pressman pawned his wife’s engagement ring to open a menswear store on New York's 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.
The business revealed last month that it was exploring its options including a potential bankruptcy filing. It is understood that there had been some buyer interest but time ran out to secure a deal.