Will Barneys New York File for Bankruptcy?
Barneys New York may join the list of retail stores filing for bankruptcy, according to CBS News. The luxury department store is considering its options, including bankruptcy, due to high rents and a changing consumer landscape. Most of Barneys' stores are in prestigious neighborhoods in cities like Boston, New York and Los Angeles, and rent prices at these locations are skyrocketing.
For example, Barneys' rent at its Manhattan store on Madison Avenue will soon rise to nearly $30 million. The rise in rent almost cancels out the company's earnings before taxes, interest, amortization and depreciation, the article states. Barneys is no stranger to bankruptcy. The retailer also filed for bankruptcy in 1996, which led to the company's founders, the Pressman family, selling their stake.
Total Retail's Take: Barneys considering bankruptcy is evidence that luxury retail brands aren't safe from the challenges brick-and-mortar retailers are facing, including skyrocketing rent. Barneys New York is an iconic brand, particularly in Manhattan, but the company has failed to adapt to the the ever-changing consumer landscape. Last time Barneys filed for bankruptcy it was able to survive, so maybe with some reorganization and a strategic plan for better competing with emerging online brands, the company will live on.
Ashley Chiaradio is the Senior Content Strategist at Total Retail. Ashley has been creating content for more than 7 years, and provides a unique insight in covering the retail industry having worked directly for retailers in the past. She’s passionate about profiling women leadership in the space.