Storied retailer reaches Chapter 11
Barneys to close most stores, seeks buyer
NEW YORK — Barneys New York is filing for Chapter 11 bankruptcy protection, the latest retailer to buckle as shoppers move online.
The iconic clothier founded almost a century ago will keep the doors open at its 10story Madison Avenue store. It has secured $75 million in financing to pay employees and vendors as it seeks a buyer.
Stores in Chicago, Las Vegas and Seattle will close along with 12 concept and warehouse locations.
Stores in Beverly Hills, Calif.; San Francisco; and Boston will remain open, as well as two warehouse locations in New York and California. However, the company said Tuesday it’s reviewing all store leases.
Barneys, controlled by New York hedge fund Perry Capital, listed more than $100 million in debt and more than $100 million in assets in its bankruptcy filing in the Southern District of New York.
A strong economy has traditionally boosted luxury sales but like retailers across the spectrum, Barneys and other high-end stores have struggled to entice people through the door. They’re seeing younger shoppers migrate online to sites like Net-a-Porter, which offers same-day delivery for luxury goods, or resale sites like The RealReal.com. Moreover, wealthy shoppers are going directly to luxury brands’ online sites or shops.
Nordstrom has reported slowing sales. And Neiman Marcus Group, which also operates Bergdorf Goodman, posted a loss and a sales decline in its most recent quarter.
Barneys’ Manhattan landlord doubled the rent at its flagship store on Madison Avenue to nearly $30 million this year.
“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,” said CEO Daniella Vitale.
Joseph Aquino, who runs a real estate services firm under his name in Manhattan, says the days of the shop-till-you drop mentality on Madison Avenue popularized by the 1990s HBO series “Sex in the City” are over.
“She was 45 and now she is 65 . ... She isn’t shopping like she was 45,” Aquino said. “We are in the phase where a lot of younger shoppers don’t want to go the high street. They sit around and buy online and that’s what we are fighting against.”