It’s bad news bears for one of our favorite luxury retailers. Barneys New York is set to file bankruptcy come Monday after their primary lender denied their request for an emergency loan. It is said they’re about $200 million in debt. Barneys have been in talks about a debtors-in-possession financing plan which is special financing that is provided for companies in financial distress. This plan will call for Barneys to close most of their locations, including their Chicago Oak Street location.
Since January, Barneys New York on Madison Ave’s rent has went from $16 million to almost $30 million in which has caused the company to struggle. Real estate issues have also caused problems across the Illinois, California and more locations. The company is close to a deal with Gordon Brothers and Hilco Global. These firms specialize in selling assets for companies in these financial situations.
What exactly does this plan mean for the retail company?
Barneys have 13 department stores and 9 warehouses. If the deal is a go, Barneys will have 60 days to find a buyer while still operating. The plan will cause the company to only operate out of 7 core locations across the country with the remaining locations closing immediately. If the deal so happens to collapse, on the other hand, Barneys will have to liquidate.
With Barneys being one of the smaller luxury department stores, opposed to Neiman Marcus and Saks Fifth Avenue with 40 locations, the company isn’t the only one to struggle with the competition of online shopping and cosignment shops buying and selling secondhand or new items.
This would make the second bankruptcy filing Barneys endured since 1996. They also avoided bankruptcy back in 2012 so hopefully they can beat the odds yet again.
Last modified: August 5, 2019