Barneys New York, the US luxury department store chain made famous by Sex and the City, has filed for bankruptcy and put itself up for sale.
The retailer, which first opened its doors in New York in 1923, said it would close 15 of its 22 stores, including flagship branches in Chicago, Las Vegas and Seattle, five small concept outlets and seven Barneys Warehouse discount stores. Barneys’ flagship shops on New York’s Madison Avenue, and in Beverly Hills, San Francisco and Boston, are to remain open.
Barneys’ decision to file for chapter 11 bankruptcy protection is the latest sign of a tough trading backdrop for US retailers, who are expected to close a total of 9,000 stores this year, according to estimates from Cushman and Wakefield, the property advisory firm.
Like many department stores around the world, Barneys has recently been hit by rising rental costs as well as heavy competition from online rivals including luxury goods re-sellers such as The RealReal.
The company is continuing to trade after securing $75m in new funds from Hilco Global and Gordon Brothers Group, which have a history of snapping up distressed companies.
Barneys is now owned by the investor Richard Perry and the private-equity firm Yucaipa Capital. It previously filed for bankruptcy in the 1990s before enjoying a revival in the days of the designer-obsessed, shopaholic characters featured in the Sex and the City television series.
The Map to Modern Luxury
THE CURATED CALENDAR
Discover the world’s most prestigious gatherings & exhibitionsIn papers filed in the US bankruptcy court for the southern district of New York, the chain said it had debts of between $100m and $500m.
Before an anticipated cash crunch, designer brands had reportedly withheld shipping new orders to the store, a sharp turnaround to years when designers were keen to be listed inside.
The chief executive, Daniella Vitale, said Barney’s had been “dramatically impacted by the challenging retail environment and rent structures that are excessively high relative to market demand”.
guardian.co.uk © Guardian News & Media Limited 2010
Published via the Guardian News Feed plugin for WordPress.
