Barneys New York files for bankruptcy, closing stores
Barneys New York announced that it has filed for Chapter 11 bankruptcy protection as it searches for a buyer.
To help pay employees and vendors in the interim, the retailer has secured $75 million in new capital.
“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,” said Daniella Vitale, president and CEO. “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 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.”
As a part of the Chapter 11 process, Barneys New York will close its physical store locations in Chicago, Las Vegas and Seattle, in addition to five smaller concept stores and seven Barneys Warehouse locations. Barneys New York will continue to serve customers in five flagship locations: Madison Avenue, Downtown NYC, Beverly Hills, San Francisco and Copley Place in Boston, as well as two Barneys Warehouse locations, including Woodbury Common and Livermore. In addition, Barneys.com and BarneysWarehouse.com will continue serving our customers without disruption.
The $75 million in new capital for Barneys New York is from affiliates of Hilco Global and the Gordon Brothers Group, which, combined with operating cash flow, will help Barneys New York to meet its go-forward financial commitments.
“We are pleased to partner with Barneys New York as it takes this proactive step to conduct a value maximizing sale process,” said Ben Nortman, EVP of Hilco Global. “We are investing in Barneys because we believe that it is an iconic retail brand. We look forward to working with the team to achieve the best outcome for all stakeholders.”
Kirkland & Ellis LLP is serving as the Company’s legal advisor, Houlihan Lokey is serving as financial advisor and M-III Partners, L.P. is serving as its restructuring advisor.
Founded in 1923 by Barney Pressman, Barneys New York sells home furnishings, women’s and men’s apparel, accessories, shoes, jewelry, cosmetics and fragrances.
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