Barneys New York, an icon of New York retail, filed for bankruptcy early Tuesday morning, with a plan to significantly reduce its physical footprint, as it looks for a buyer to stave off liquidation. The retailer said it will focus on running only five of its more than 10 namesake stores: on New York’s Madison Avenue, in downtown Manhattan, Beverly Hills, San Francisco and Copley Place. It will also keep open its Barneys Warehouse stores in Woodbury Common and Livermore. It plans to close its stores in Chicago, Las Vegas and Seattle, as well as five smaller concept stores and seven Barneys Warehouse stores.
Total Retail's Take: Barneys New York has been trying to adapt its business in order to survive the strong headwinds of rising store rents, increased online and direct-to-consumer buying, and brands shifting away from a reliance on department stores, even luxury outposts such as Barneys. The luxury retailer has invested in its e-commerce business, which has seen its sales grow to $200 million; opened a restaurant brand, Fred's, in some of its department stores; and recently announced the opening of a luxury cannabis shop. However, these moves proved to be not enough. The luxury retail market is changing rapidly, and Barneys New York as well as other players in the space, including Neiman Marcus, Saks Fifth Avenue, and Nordstrom, are trying to figure out how to survive. A bankruptcy reorganization, decreased physical footprint, new product categories (e.g., cannabis), and other changes will hopefully position Barneys New York to continue on.