Barneys New York is examining strategic alternatives for the business that include a potential bankruptcy filing by the end of July, people familiar with the matter told Reuters and CNBC. However, the sources cautioned that the retailer has not made a final decision.
“We continue to work closely with all of our business partners to achieve the goals we’ve set together and maximize value,” Barneys said in a statement sent to Reuters. “To that end, our board and management are actively evaluating opportunities to strengthen our balance sheet and ensure the sustainable, long-term growth and success of our business.”
The retailer has retained law firm Kirkland & Ellis and financial advisers M-III Partners to assist with the preparations, according to people cited in the coverage. Bankruptcy is just one potential avenue, with other possibilities including a sale or securing further financing.
Rent at the Barneys flagship on Madison Avenue jumped from $16 million to $30 million after the lease expired in January, according to CNBC. Barneys is just one of several retailers suffering from rising rents on flagship stores: Gap closed its NYC flagship in January, while L Brands shuttered all 23 Henry Bendel stores, including the brand’s flagship.
Barneys has been pursuing multiple avenues to improve its performance, including programs that could help reach younger shoppers. One initiative was launching The High End, a cannabis shop inside the retailer’s Beverly Hills, Calif. flagship. The retailer also introduced a new loyalty program in March that offers tiered experiences, VIP services, perks and rewards depending on how much shoppers spend. Rewards-based programs appeal to all generations of shoppers.
“Who are we to tell people what luxury means to them?” said Daniella Vitale, CEO and President of Barneys New York during a panel at Shoptalk 2019. “What Barneys offers is going to be very different to a 65-year-old than to a 17-year-old.”