US Luxury Department Store Chain Barneys New York Files for Bankruptcy
Business 6 August 2019 Arabia Day Newsdesk 0
US luxury department store chain Barneys New York has filed for Chapter 11 bankruptcy and put itself on sale.
The firm has faced soaring rents and was unsuccessful in its earlier attempts to find a buyer.
Barneys has secured $75m (£61m) in new financing from Hilco Global and the Gordon Brothers Group to stay afloat.
It will close stores in Chicago, Las Vegas and Seattle, along with five smaller concept stores and seven Barneys Warehouse locations.
Barneys has faced a steep rise in rent at its Manhattan flagship store on Madison Avenue, New York, to $30m from $16m.
Chapter 11 postpones a US company’s obligations to its creditors, giving it time to reorganise its debts or sell parts of the business.
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. “
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