US luxury department store chain, Barneys New York, has filled for bankruptcy and puts itself on sale. The firm has been the victim of high rent prices and unsuccessful attempts to find a buyer. They have filed for Chapter 11 bankruptcy.
Barneys has secured $75m of new financing from Hilco Global and the Gordon Brothers Group to stay afloat. Rent for their Manhattan store rent had a steep increase from $16m to $30m.
Chief executive Daniella Vitale said: “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 court-supervised process, which will provide the company the necessary tools to conduct a sale process, review our current leases and optimise our operations.”
Barneys was founded in 1923 when Barney Pressman pawned his wife’s engagement ring and used the cash to open a 500-square-feet men’s discount clothing store.
The business will close stores in Chicago, Las Vegas and Seattle, along with five smaller concept stores and seven Barneys Warehouse locations.
The firm will keep open five locations: Madison Avenue, Downtown NYC, Beverly Hills, San Francisco and Copley Place in Boston, as well as two Barneys Warehouse locations. It will also keep open its websites.
