In the ’90s, the American chain of luxury department stores Barneys New York went bankrupt due to the over-expansion of large stores being located in cities where consumers weren’t familiar or interested in the company’s brand of luxury and unique merchandise edit. With that being said, Barneys has always had a questionable reputation when it comes to its financial track record on paying vendors.
According to WWD, owner Richard Perry has failed to sell the business over the years and is now “actively evaluating opportunities to strengthen its balance sheet" where possibilities vary from finding an investor, incurring debt or declaring bankruptcy. Rent is also an additional factor when it comes to retail bankruptcies, although Barneys does not have significant debt, it did get an increase in rent from $16 million USD to more than $30 million USD a year for its Madison Avenue flagship.
In addition, vendors have expressed concern regarding the company’s overdue payments suggesting issues with liquidity. Statements from Barneys executives have indicated that the business is overall healthy with significant e-commerce gains and has plans to expand in New Jersey and Miami. However, reports of a likely bankruptcy have appeared on CNBC last weekend. "We continue to work closely with all of our business partners to achieve 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,” Barneys said in its statement.
No further reports have been released, so stay tuned for any updates.
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