Barneys has filed for Chapter 11 bankruptcy.
The high-fashion icon said in a statement this morning that it had also secured $75 million to help meet its financial commitments, CNN reports.
“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 CEO Daniella Vitale said in a statement. The bankruptcy filing will allow the company “to conduct a sale process, review our current leases and optimize our operations,” she added.
Barneys has been around for almost 100 years and has 2,300 employees. Unlike other retailers that rely on a lot of part-time workers, 90% of Barneys’ workforce is full time.
Nearly half of the hourly employees are represented by a union, which is also rare in modern retail.
Barneys has reportedly been facing problems for a minute. It could not afford rents on locations that were like deserts after losing traffic to online shopping. Bankruptcy court docs show the company owes nearly $10 million in unpaid rent to its major landlords.
Barneys is keeping hope alive, though. It says it is looking for a buyer that will keep five of its flagship stores and two of its warehouse locations open.
Those locations are primarily in high-income markets including Manhattan, Boston, San Francisco and Beverly Hills. But the cities of Chicago, Las Vegas and Seattle can say “bye bye”
It may be a shock to many, but the move was actually not unexpected. Reuters reported last month that Barneys filing for bankruptcy protection could help with the pressure of those expensive leases.
It’s also a shock that such a luxe store is going the way of stores such as Toys ‘R’ Us, Charlotte Russe and Payless.
Barneys has several locations in the United States, but its headquarters and flagship store line the area around New York’s Fifth Avenue.
