Barneys in Madison Avenue, where its rent jumped high on January. (Image via Best Media)

Barneys is Facing Bankruptcy

Toska Dhia Andana
Business & Industry
Retail & Food Services
Jul 15, 2019
2530
Who doesn’t know Barneys? The luxury department store is often mentioned in films as well as magazines, making many familiar with the name. Barneys is founded in 1923, by Barney Pressman. Barneys was originally a men’s discount clothing store, located on Seventh Avenue and 17th Street. However, about 37 years later, in the 1960s, Barney’s son did a transition of the store—from a discount store to a luxury retailer. Soon after, Barneys are known as New York luxury fashion and it introduced designers like Giorgio Armani.

Sadly, the almost 100-year-old store is now facing bankruptcy. It is reported that Barneys is working with law firm Kirkland & Ellis to prepare for a potential bankruptcy filling. As the world became digitalized, it seems like Barneys could not keep up with its sale. It is revealed that Barney lost quite customers due to the existence of online stores. Their customers now prefer to shop online, or buy the goods directly from the brands (most of them have websites as well).

There is one more reason for them to filed for bankruptcy. Barneys has 10 stores in New York, California, Chicago, Massachusetts, Las Vegas, Seattle and Pennsylvania. Their store in Manhattan is said to be the reason why Barneys is facing bankruptcy. Barney is renting a place for their store on Madison Avenue. However, the owner, Ashkenazy Acquisition Corp, decided to increase the rent on January this year—from $16 million to $30 million. With the decline of their sales, Barney is struggling to survive.

Barney is not the only department store that is facing bankruptcy. Previously, Toys R Us filed for bankruptcy in which they close all of their stores in the US. They were closing approximately 800 stores on March 2019.

Source: https://www.cnbc.com/2019/07/13/barneys-explores-possible-july-bankruptcy-filing-grapples-with-manhattan-rent-hike.html

USA , Barneys , NewYork , Retail , DepartmentStore , Clothes