7 months ago
BARNEYS NEW YORK IN PREPARATION OF BANKRUPCY
Luxury retailer Barneys New York is reportedly facing financial turmoil due to the high rent rates for its Manhattan flagship store. Prices for rent have almost doubled for the retailer, as not too long ago, rent sat at $16 million USD, but has now shot up to $30 million USD. The steep incline has led to the company’s finances faltering, with close sources to Barneys revealing to Reuters that the retailer has approached law firm Kirkland & Ellis to begin preparing for a possible filing for bankruptcy. However, the report also stated that it remains unclear whether Barneys New York will actually follow through with that course of action. The retail giant has since released a statement saying that it is currently “evaluating opportunities to strengthen our balance sheet and ensure the sustainable, long-term growth of our business.” Barneys New York was founded in 1923, and became the first American department store to provide the full line from Giorgio Armani. It now has more than 10 stores across the States, in locations such as California, Florida, and Illinois. Barneys New York is now reportedly in talks with Wells Fargo regarding a new loan in preparation for bankruptcy. The luxury retailer is hoping to obtain a debtor-in-possession loan from its existing lender and is currently negotiating terms. The loan will allow operations to proceed as usual while Barneys focuses on attaining a deal in court with its lenders and landlords. While Wells Fargo declined to comment, a representative from Barneys issued the following statement via email: “We continue to work closely with all of our business partners to achieve the goals we’ve set together and maximize value. 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.” Stay tuned as the story develops.