The prospect of a New York City without a Barneys New York department store is disconcerting – but it may happen.
By: David Kantelevich
The venerable retailer says it is mulling a bankruptcy filing – in large part, according to reports, because of a major rise in its annual rent at its Madison Avenue Flagship location: from $16 million to $30 million store.
When Ashkenazy Acquisition Corporation bought a trio of Barneys stores in 2001, it worked out a two-decade-long lease for the Madison Avenue locale. The $16 million lease stipulated that the rent could be hiked to accord with fair market value upon renewal, according to an article in the New York Times.
“Last year, Ashkenazy nearly doubled the rent on the 275,000-square-foot store at 660 Madison Avenue, pushing the retailer to consider a number of options, including filing for bankruptcy, renegotiating leases on its flagship and its 22 other stores, as well as taking on a new investor to inject new capital into the company,” reported Crain’s New York Business.
Barneys New York is a luxury specialty retailer renowned for having the most discerning edit from the world’s top designers, including women’s and men’s ready-to-wear, accessories, shoes, jewelry, cosmetics, fragrances, and gifts for the home. Barneys’ signature sense of wit and style is manifested in its creative advertising campaigns, original holiday themes, and celebrated window displays. Today, Barneys New York operates flagship stores in New York City, Beverly Hills, Chicago, Seattle, Boston, San Francisco, Las Vegas and along with a preeminent luxury online store, Barneys.com, as well as 16 other full price stores and warehouse stores across the United States.
“At Barneys New York, our customers remain our top priority and we are committed to providing them the excellent services, products, and experiences they have come to expect. We continue to work closely with all of our business partners to achieve the goals we’ve set together and maximize value. To that end, 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,” a Barneys spokesperson said in a statement released to Business Insider. “At the same time, we continue to evolve our strategy and business model for the benefit of all of our stakeholders through our forward-thinking and uniquely modern approach, as demonstrated by our announced store openings at American Dream in New Jersey and at Bal Harbour Shops in Miami Beach, our new store in Las Vegas, Freds at Barneys New York coming to Copley Place in Boston, the launch of our luxury cannabis lifestyle and wellness concept shop and various pop-up and vendor installation projects.”
