NEW YORK (CBSNewYork) – After weeks of trying to find a buyer or investor, luxury retailer Barneys has filed for bankruptcy protection.
The chain also put itself up for sale and secured $75 million in financing to keep operating during the bankruptcy process.
- Click here to see court filings in the case.
The Barneys on Seventh Avenue and 16th Street was the very first location. It opened back in 1923 when Barney Pressman pawned his wife’s engagement ring and used the cash to open his very first department store.
Stores in Chicago, Las Vegas and Seattle are slated to close, along with seven Barneys Warehouse locations and five smaller concept stores.
Barneys’ two New York locations on Madison Avenue and Seventh Avenue, however, will stay open — for now.
“Those rents doubled in New York, which has put tremendous pressure on them because you’re not going to charge consumers more to cover that,” Chris Paradysz, ForwardPMX chief growth officer, told CBS2’s Tara Jakeway.
Paradysz has been a retail expert for over 20 years. He points to rising rents as a reason behind the Barneys bankruptcy and says mobile purchasing hasn’t helped.
“We could shop right here, right now and get exactly what we want and never move from this spot. That has pretty big implications on a retail store,” he said.
Implications that will be felt by a significant chunk of Barneys’ 2,300 employees, who will lose their jobs as the stores shutter.READ MORE: Gov. Kathy Hochul 'Aggressively' Pushing For COVID Vaccination Sites At Schools
That’s becoming a pattern recently. Giant retailers like Toys “R” Us and Sports Authority both declared bankruptcy and never recovered.
Shopper Tony Munyoro hopes Barneys doesn’t follow suit… because it’s the only place he buys his suits.
“I am shocked. I thought they were doing well. I love their clothes,” Munyoro said. “It’s perception. I shop at Barneys. It’s important for me.”
But some New Yorkers say it’s that perception that may have put them in this situation.
“It’s kind of an icon, but their prices are way too high,” West Village resident Sharon O’Connor said.
President and CEO Daniella Vitale released the following statement Tuesday:
“For more than 90 years, Barneys New York has been an iconic luxury specialty retailer, renowned for its edit, strong point of view, creativity and representation of the world’s best designers and brands. 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. In response to these obstacles, the Barneys New York Board and management team have taken decisive action by entering into a courtsupervised process, which will provide the Company the necessary tools to conduct a sale process, review our current leases and optimize our operations. While doing that we are receiving new capital to help support the business. Pursuing a sale under the Court’s supervision provides the quickest and most efficient means of maximizing value while ensuring we continue serving both new and loyal customers.MORE NEWS: Want To Make Sure You Have Your Holiday Gifts On Time? Start Shopping Now, Retailers Say
“I would like to express my deep appreciation and profound gratitude for the continued support of our employees, vendor community and customers – truly the lifeblood of Barneys New York. Our decadeslong partnerships and relationships will continue for many years to come. We are unwavering in our commitment to executing our forward thinking vision on what retail should look like today.”