US luxury departmental store operator Barneys New York Inc. is said to be exploring options, which now include filing for bankruptcy. The store is struggling as high rents and a change in consumer taste affect the economy.
The retailer that would have soon been celebrating a century of business, is known for curating a high-end designer collection and is working with a law firm called Kirkland & Ellis LLP as it prepares to face the reality of potential bankruptcy in the near future. Barneys has not yet reached a final decision as to seeking protection from bankruptcy and is still weighing out its options which can address the struggles of an economy where sales are low and rentals are too high. Filing for bankruptcy would be a good solution to fight the leasing costs.
The flagship department store on Madison Avenue in Manhattan is one of the main struggling stores. At the store, customers are the main concern, and excellent services, products, and experiences are what is expected from the brand. In a statement from Barneys, they have said that an achievement of goals and maximization of value is the driving force behind their operations. The management of the store are now looking into options which will help them strengthen their balance sheets and ensure the sustenance of long term growth and success in their business.
If they do file for bankruptcy, Barneys would become one of the most high profile stores to fall victim to the change in consumer patterns and the fall of the retail sector. This would go to show that no department store, no matter how luxurious, is immune to the fierce competition provided by e-commerce portals such as Amazon. Sears, Toys ‘R’ Us, Gymboree, etc. have all filed for bankruptcy and liquidation in the last one year.
Barneys also has other business ventures which have diverted from their department stores. These include warehouse outlets and Freds Restaurants. All together, Barneys operates from 28 locations including Beverly Hills, Chicago, Seattle, Boston, California, San Francisco, and Las Vegas. In the 1930s, Barneys made their business popular by placing women dressed as barrels in New York City, outside beer halls, where they handed out matchbook advertisements for their stores.
They are known for their exclusive curated clothing designed by the likes of Burberry and became a luxury store in the 1960s.