Luxury department store Barneys New York has revealed they are preparing for bankruptcy. The world famous chain has not been impervious to the recent struggles befallen to much of the retail world and, as such, are definitely nearing an agreement with lenders. They hope the deal will help to secure enough financing to support them until they find an appropriate buyer.
Primarily, it appears Barneys is inching closer to a deal with Gordon Brothers and Hilco Global. These are two firms who specialize in selling assets for distressed companies. A deal, here, would definitely aim to give them at least 60 days to find a buyer during bankruptcy court proceedings. If they cannot reach a deal, it is likely Barneys will have to liquidate.
According to a spokesperson with the company, “The Barneys New York Board and management continue to work constructively and collaboratively with a number of parties and are committed to reaching mutually agreeable resolution to strengthen our business.”
More specifically, Barneys chief executive officer Daniella Vitale comments, “Our goal is to continue serving our customers in key flagship markets and globally through Barneys.com for the long term. While difficult decisions had to be made, this process will allow us to reset our financial position and maintain our longstanding vendor relationships.”
Barneys has 13 department stores and nine warehouse stores but they are not the largest chain, by far, to face the modern retail struggle. Hudson’s Bay, JC Penney, Macy’s, and even Nordstrom have all encountered hardship as more and more shoppers flock to the internet to save money buying directly from brands or liquidation sites. Luxury brands—like Barneys—has been mostly immune to the online trend until only very recently.
Of course, Barneys is not going to have an easy time trying to find an occupant for its stores. Its flagship store on Madison Avenue, alone, recently jumped from $16 million to $30 million this January. The property is currently owned by Ashkenazy Acquisition.