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The most luxurious department store declared bankruptcy
A lowered people frequency, expensive rent and online shopping trend are to be blamed…
Barneys New York has been enchanting rich people for almost one century. Ever since Barney Pressman opened his first boutique on Seventh Avenue in 1923, this brand has experienced an exponential growth and it now has over 20 spaces in the US. However, despite its success, this department store chain is living through the same faith as many others.
On Saturday, Reuters has published that sources “close to this matter” believe that Barneys New York INC is “exploring options which include filing for bankruptcy, because they’re battling with high rent and change of taste of their buyers”. Luxury department store has been working with legal firm Kirkland & Ellis LLP to prepare for filing this in the next few weeks.
In statement for CNN Business, people from Barneys say that they’re “actively evaluating their possibilities for creating a strong balance and achieving a sustainable, long-term growth and success of their business”. Whether or not those options include bankruptcy was not stated.
In March, the rumors that Barneys is planning to resize their famous store on Madison Avenue have appeared and they are most certainly not alone in that fight. At the end of last year, iconic luxury boutique Henri Bendel has closed its doors after 123 years of business, hinting that luxury sphere is to expect some really hard times. Three industry greats, Calvin Klein, Lord & Taylor and Tommy Hilfiger followed up quickly, closing their boutiques on Manhattan. High rent prices, combined with lowered frequency in traditional way of shopping and growing popularity of online shopping have contributed to this story.
In order to stay relevant, luxury boutiques have turned to experimental concept shops and pop-ups in order to activate their buyers. Barneys has launched a decadent marijuana store in their Beverly Hills establishment, but it seems that it wasn’t enough to cope with the large e-commerce platforms, such as Net-a-Porter and others.
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