Iconic department store Barneys is set to close after it filing for bankruptcy. The New York department store has felt the effects of rising rents and fewer visitors to its luxury fashion boutiques.
The chain listed estimated liabilities of between $100 million and $500 million and sought to avert bankruptcy by finding a partner or buyer, according to the Business of Fashion.
George Angelich, from law firm Arent Fox, explained that “it becomes very challenging to maintain profitability” when rents increase and consumers favour buying online rather than in store.
Its closure marks changing times for the high-street, as more consumers favor shopping online than in brick and mortar stores.
Here in the UK, there are similar pressures. One in 12 shops on the British high-street have closed in the last five years according to the Guardian. In June, Topshop, formerly a British high street giant, was saved from administration after a company voluntary arrangement (CVA) agreed to Green’s proposed rent cuts – up to 50 per cent less – plus 23 store closures and 520 job losses.
Barneys quickly became an icon of high fashion for men and women in the 1970s, after originally being founded as a men’s retailer in 1923. The Manhattan store went bankrupt before in 1996 after falling out with a Japanese partner.
In 2019, the retailer is owned by investor Richard Perry and operates stores in New York City on Madison Avenue and Chelsea. Other store locations include Beverly Hills, Chicago, Seattle, Boston, San Francisco and Las Vegas.
Barneys planned to downsize the Madison Avenue store to reduce the annual rent, which had tripled the year according to Bloomberg.
From: Harper’s BAZAAR UK