Barneys Released a Candid Statement About Bankruptcy
On August 6, the department store voluntarily filed for Chapter 11 bankruptcy.
It looked like the shopping landscape was going to change forever. Barneys New York, the department store that championed under-the-radar designers and brought a dash of cheeky irreverence to New York City's Madison Ave. announced that it was going to file for Chapter 11 bankruptcy protection earlier this year. But, shoppers got a glimmer of hope from the store's Instagram, where it posted a note informing everyone that the store is "here to stay."
"We are not closed," reads one of the images in the store's latest gallery post. The text is over the shop's famous New York façade, along with another bold statement: "Barneys til I'm dead." Both were in all capital letters and the store's current throwback retro font.
"Like a lot of us out there, we have had our share of financial struggles. But, despite what you may have heard, Barneys is here to stay," the note begins. "Behind these doors you can still find the best date night heels, CBD moisturizers, bar mitzvah suits, it-bags, little black dresses, statement sneakers, and gifts for your chic aunt that money can buy in New York City."
After Barneys's announcement back in August, there were reports that locations in Chicago, Las Vegas, and Seattle would close. The focus would shift to the stores on Madison Avenue, downtown Manhattan, Beverly Hills, San Francisco, and Copley Place in Boston. Barneys post doesn't clarify what's going to happen with each individual store.
"To buy, to behold, to splurge, to strut, to indulge, to look fabulous are basic human instincts — and sometimes they can get us in trouble," the note continues, maybe offering a little bit of insight to how the store managed to get itself into its current state of financial instability. "Nevertheless, we are open for you. And this is not our last season."
CNBC noted that Barneys had raised "$75 million to support a sale process" and that without a serious buyer, the store would have to liquidate. Excessive rents were one reason that analysts blamed for the store's situation, though the site notes that Barneys has faced similar scenarios in the past. The first time Barneys filed for bankruptcy was in 1996, when Japanese department store company Isetan owned it. Then, in 2012, Barneys was in dire straits again before a hedge fund run by New York City financier Richard Perry took over with a $540 million debt-for-equity swap. The fund continues to fund Barneys, but it hasn't adjusted its numbers for rising rents. Analysts also cite the rise of online retailers such as Net-a-Porter, Yoox, and Farfetch as unforeseen competition for the heritage department store.