Barneys New York on Tuesday said it is filing for bankruptcy and will close 15 locations. The high-end retailer is the latest retailer to seek bankruptcy protection and shutter stores amid a consumer shift to online shopping.
Barneys said it will shutter 15 locations, leaving it with seven stores, including two Barneys Warehouse locations. The other stores that will remain open are its flagship New York store on Madison Avenue and another located in downtown Manhattan, as well as stores in Beverly Hills, California, San Francisco and Copley Place in Boston.
Barney Pressman founded the business in 1923 in New York as a discount clothing store, with the company refashioning itself as a luxury retailer under his son in the 1960s. In the 1990s, it started expanding nationally and to Japan.
Barneys had recently hired legal and financial advisers to help consider its options, according to The New York Times, which noted that the rent on its Madison Avenue store had surged from $16 million to $30 million. The stores had also struggled with a shift to online shopping, a pressure that almost all retailers, regardless of the wealth of their customer base, are struggling to offset.
“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,” Barneys CEO Daniella Vitale said in a statement.
More than 7,000 stores have closed this year across the retail sector, according to Coresight Research — far outstripping the pace of closures in 2018. The retail data firm forecasts that up to 12,000 stores close in 2019.
As part of its bankruptcy filing, Barneys New York will close its stores in Chicago, Las Vegas and Seattle, as well as five smaller stores and seven Barneys Warehouse locations. The two Barneys Warehouse locations that will remain open are Woodbury Common, New York, and Livermore in California.
Barneys New York’s bankruptcy is adding to the growing river of financially troubled retailers, said outplacement firm Challenger, Gray & Christmas.
“We have seen a number of retailers filing for bankruptcy, closing locations, and cutting workers, and indeed, the majority of bankruptcy cuts occurred in that industry,” said Andrew Challenger, vice president of Challenger, Gray & Christmas in a statement.
Through July, U.S. companies have announced 42,937 job losses due to bankruptcy, up 40% from the same period last year. That also amount to the highest seven-month total since 2009, when more than 50,000 job cuts due to bankruptcy were announced, the company said.