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Reports reveal high rents at Manhattan's flagship store are hurting Barneys and could lead to bankruptcy protection (Photo: Tom Sibley / Barneys)
Barney may be about to file for bankruptcy protection while Manhattan's luxury retailer faces high rents and online shopping, according to two media reports.
The move is largely aimed at solving the problems associated with expensive leases, particularly its flagship location on Madison Avenue in Manhattan, which hinder the retailer's business, the report said.
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CNBC also confirmed the report, citing unnamed sources, and pointed out that the Madison Avenue store rent had jumped from about $ 16 million to $ 30 million in January, virtually eliminating the profit before interest, taxes and Depreciation of the retailer. The site is owned by Ashkenazy Acquisition Corp.
Other retailers owning flagship sites in Manhattan have faced similar circumstances and have finally closed these stores. Ralph Lauren closed his Fifth Avenue store in 2017. Lord & Taylor closed its flagship Fifth Avenue in January.
If Barneys were to apply for bankruptcy protection, they would be following a long line of retailers, especially shopping center brands, to succumb to the changing retail landscape.
Sears, Toys "R" Us, Payless and Gymboree also went bankrupt in the past year.
It would also highlight that luxury brands are also vulnerable to stiff competition from online retailers, including Amazon.
The discount shoe retailer Payless ShoeSource is about to close all of its stores when its file goes bankrupt later this month. Mercer Morrison of Veuer has history.
Buzz60
Read or share this story: https://www.usatoday.com/story/money/2019/07/14/barneys-bankruptcy-reports-say-luxury-retailer-may-file-soon/1728925001/
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