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NEW YORK — Barneys New York is filing for Chapter 11 bankruptcy protection, the latest retailer to buckle as shoppers move online and real estate costs soar.
The iconic clothier founded almost a century ago will keep the doors open at its 10-story Madison Avenue store, but its secured $75 million in financing to pay employees and vendors as it seeks a buyer.
Stores in Chicago, Las Vegas and Seattle will close. Twelve concept and warehouse locations will also close and the company said Tuesday it's reviewing other store leases. Stores in Beverly Hills, California, San Francisco and in Boston will remain open, as well as two warehouse locations in New York and California. It will also have an online presence.
Barneys' landlord in Manhattan doubled the rent of its flagship store to nearly $30 million earlier 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.
In its bankruptcy filing in the Southern District of New York, Barneys lists more than $100 million in debt, and more than $100 million in assets.
Retailers are fighting to maintain sales and they're not getting much relief on leases, creating a financial vice that is squeezing even iconic brands like Barneys New York.
The number of retail stores closed in the U.S. this year has already surpassed the total number in 2018, according to Coresight Research, which expects 12,000 will be shuttered in 2019. Coresight said 7,567 retail stores have closed this year, compared with 5,864 in all of 2018.
The escalating trade war between China and the U.S. has intensified that pressure, leaving clothing companies scrambling to find new routes and suppliers. Over the past year, the retail sector has consistently bled jobs.
Barneys' roots date back to 1923 when Barney Pressman pawned his wife's engagement ring and used the cash to open a 500 square foot men's discount clothing store on Seventh Ave. and 17th St. in Manhattan.
How does the new landlord expect to get $30 million in rent from somebody else?
It's a 10 floor building. I am sure WeWork will coming knocking. Or maybe they will convert to office/residential.
Quote:
Originally Posted by vision33r
It's not just the rents, they've fallen out of favor with millennials.
Barneys didn't reinvent themselves. Everything you can buy at Barney's you can buy on a website. You also have high-end designer website in which you can purchase the expensive items. Go to their website. I feel like they saturated themselves with items.
Barneys didn't reinvent themselves. Everything you can buy at Barney's you can buy on a website. You also have high-end designer website in which you can purchase the expensive items. Go to their website. I feel like they saturated themselves with items.
Of course they reinvented themselves. They were a tiny little rinky-dink place when they started out.
I wish my father were alive. He was always amused at the way Barney's came up in the world.
Of course they reinvented themselves. They were a tiny little rinky-dink place when they started out.
I wish my father were alive. He was always amused at the way Barney's came up in the world.
This is true, back in the day (70s) Barney's was a place on 7th Avenue and 18th Street where my working class dad went to buy a nice suit but it wasn't that high fashion or extremely expensive.
I haven't shopped at Barney's in years. They did carry some "Made in Italy" Italian brands that I purchase, such as Jeckerson and Luciano Barbera, but you can find both brands in small boutiques or just go to their site and order.
I haven't shopped at Barney's in years. They did carry some "Made in Italy" Italian brands that I purchase, such as Jeckerson and Luciano Barbera, but you can find both brands in small boutiques or just go to their site and order.
That in a nutshell is large part of Barney's woes. To be fair it is hitting all retail including high end, but places like Barney's that are "one trick ponies", so to speak are hurting more.
Barney's was the place to find new and or unique designers or things that weren't found elsewhere. Now those designers are increasingly cutting out the middle man, and going either going online themselves, or doing small shops of their own.
This is true, back in the day (70s) Barney's was a place on 7th Avenue and 18th Street where my working class dad went to buy a nice suit but it wasn't that high fashion or extremely expensive.
I was told that Barney's began as a push-cart, before they ever had a store. Just not sure if that's true.
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