More Bad News: Barneys In Bankruptcy Lists Store Closings And Top Creditors
NEW YORK, UNITED STATES — Over a week ago, DM Fashion Book reported that Barneys New York filed for bankruptcy, sunk by soaring operating costs and shifts in the luxury market (see it here).
The issue leading up to the filing captivated the fashion industry for months as the 96-year-old high-end retailer scrambled to fix its finances after rent at its Madison Avenue flagship nearly doubled to $30 million — only to fail and leave unpaid bills with a long list of designer names.
There were questions up until the end over whether the company would try to reorganize under a Chapter 11 process or liquidate under Chapter 7. Ultimately, it was a Chapter 11 filing in the Southern District of New York’s Poughkeepsie’s office. Barneys listed assets between $100 million and $500 million.
Today, we received news that Barneys New York is preparing to dramatically downsize and has issued its list of top creditors and what they’re owed.
Of its 22 locations, Barneys plans to close 15, including the Chicago, Las Vegas and Seattle flagships, five smaller stores and seven outlets known as Barneys Warehouses.
According to Daniella Vitale, Barneys chief executive officer and president, the company and its board are taking “decisive action” to get the company through a court-supervised sale process, review leases and keep a restructured Barneys business operating.
Barneys said it will continue to operate five of its flagships: Madison Avenue, 17th Street in the Chelsea section of Manhattan; Beverly Hills; San Francisco, and Copley Place in Boston, as well as two warehouse locations in Woodbury Common in Central Valley, N.Y., and San Francisco Premium Outlets in Livermore, Calif. In addition, barneys.com and barneyswarehouse.com will continue operating, the company said.
“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,” 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 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.”
Vitale went on to express her “deep appreciation and profound gratitude for the continued support of our employees, vendor community and customers — truly the lifeblood of Barneys New York.” She expressed hope that Barneys will continue well into the future, despite the uncertainties that come with being a bankrupt company.
“Our decades-long partnerships and relationships will continue for many years to come,” Vitale said. “We are unwavering in our commitment to executing our forward-thinking vision on what retail should look like today.”
Barneys filed motions seeking authorization to support its operations during the court-supervised process, including authority to continue payment of employee wages and benefits and honor customer payments and orders. Barneys said it expects to pay trade vendors, manufacturing partners and suppliers in full for goods and services provided on or after the filing date.
Kirkland & Ellis LLP is serving as Barneys’ legal adviser; Houlihan Lokey is serving as financial adviser, and M-III Partners LP is serving as the restructuring adviser
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