Barneys New York, an upscale department store chain with 28 locations nationwide, is pulling the trigger on Chapter 11 bankruptcy, with plans to close many of its standard stores, along with other iterations of the brand.
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Closing are Barneys stores in Chicago, Las Vegas and Seattle, as well as five smaller concept stores and seven Barneys Warehouse locations.
When the reorganization is done, Barneys New York will remain in business at five locations: Madison Avenue in Manhattan, Downtown New York, Beverly Hills, San Francisco and Copley Place in Boston, according to the company.
The company will also retain two Barneys Warehouse locations, one at Woodbury Common Premium Outlets in Woodbury, New York, and the other at San Francisco Premium Outlets in Livermore, California. In addition, Barneys.com and BarneysWarehouse.com will continue operations.
To facilitate its transition to a smaller footprint, Barneys has obtained $75M from debtor-in-possession lenders Hilco Global and the Gordon Brothers Group.
Jenel Management, which owns Barneys’ flagship building, is the luxe department store’s top creditor, with a nearly $6M unsecured claim, Yahoo reports. Thor Equities, which holds the retailer’s property on 1-15 East Oak St. in Chicago, has a claim of $2.2M. Fashion brands such as The Row, Celine, Yves Saint Laurent, Givenchy, Gucci and Prada are also among Barneys' larger creditors.
The company cites high rent and woes in the retail business, and for department stores in particular, as reasons for the bankruptcy and closures.
"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," Barneys President and CEO Daniella Vitale said in a statement.
Overall sales in the sector were down 5.2% in June compared with a year earlier, and down 1.1% compared with May, according to the Census Bureau. Retail sales as a whole were up 3.4% for the year in June, and up 0.4% month over month.
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