NEW YORK - Luxury department store Barneys New York has filed for Chapter 11 bankruptcy protection in an attempt to restructure its business and try to sell itself.
It plans to shutter 15 of its 22 locations including in Chicago and Las Vegas.
Its flagship on Madison Avenue and Seventh Avenue in Chelsea are expected to stay open along with locations in LA, San Francisco and Boston. It will also continue to operate two Barney's Warehouse locations – including an outlet in Central Valley, New York.
To continue operating while it reorganizes under Chapter 11 proceedings, Barneys has secured $75 million in financing. The chapter 11 filing in the Southern District indicates it has more than $100 million in assets and more than $100 million in debt with creditors including luxury labels like Yves Saint Laurent and Gucci.
In a statement, Barneys CEO Daniella Vital said, "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.”
Its Madison Avenue flagship has become a big cause of its troubles. The rent recently doubled to nearly $30 million from $16 million, compounding the tough retail landscape it had already been facing.
Vendors have reportedly become increasingly anxious about Barney's financial future and started withholding orders. The New York Times reports it may have to move to a cash on delivery policy.
This isn't Barneys first bout with bankruptcy. In 1996, it filed for protection after the Pressman family had a falling out with their investors. But when they emerged it was a different retail landscape and it was one of the most successful runs in its 90 year history.