The remaining Barneys stores, including the flagship business in Madison Avenue, New York, will join the 15 of 22 already shut after Barneys New York went into bankruptcy. Only the Boston store may remain.
Barneys, the 96-year-old luxury department store, is dead.
Barneys, which had already shut down 15 of its 22 stores after filing for bankruptcy in August, has agreed to a US$271 million deal with Authentic Brands Group and B. Riley that was announced in a bankruptcy court hearing.
The agreement means that ABG, a brand merchandiser, will own the luxury department store’s intellectual property. It will also allow the new owner to partner with rival department store Saks Fifth Avenue to use Barneys’ name in its stores.
The new owners will shut down the remaining stores — including its 275,000-square-foot flagship property at 660 Madison Avenue, New York. A property in Boston may stay open, Barneys’ attorney said in the Wall Street Journal.
“It’s a sad day,” Judge Cecilia Morris said after she made her decision.
Inventory will be turned over to a liquidation firm, meaning a potential glut of luxury goods for sale at discount prices just before Christmas.
Barney Pressman started a discount men’s clothing business in Manhattan in 1923 and it was his son Fred Pressman who turned Barneys into a luxury store full of Italian labels with the signature touch of offering alterations.
“The best value you can offer a customer is personal attention to every detail, and they will return again and again. Ultimately, the customer cares the most about how he or she is treated,” Fred Pressman said.
By 1973, the family business stocked 60,000 suits. It carried the full lines of designers such as Bill Blass, Pierre Cardin, Christian Dior, and Hubert de Givenchy. The department store is widely credited to have introduced Giorgio Armani to the US in 1976.
Kohn Pederson Fox designed Barneys’ Manhattan store on Madison Avenue for US$267 million in 1993. It was the largest new store in New York City – a 22-story building with 14 floors of offices above the store and it had gold leaf ceilings, a marble mosaic in the lobby and lacquered walls. Barneys filed for bankruptcy in January 1996.
Perry Capital became majority owner in May 2012 and the business returned to its original Seventh Avenue location in Chelsea opening a four-story Flagship store in February 2016. Daniella Vitale became CEO in February 2017.
“Earlier today, the court approved the sale of Barneys New York to Authentic Brands Group, in partnership with Saks,” Barneys New York said in a statement Thursday (local time).
“Importantly, the sale has not concluded and other bidders can still come forward before tomorrow’s closing. Over the past several months, we have worked diligently with the court, our lenders and creditors to maximise the value of Barneys in this sale process, and we continue to work with all relevant parties towards the best solution for Barneys’ employees, designers and vendors, and customers.”
Coresight Research estimates announced US store closures could reach 12,000 by the end of 2019.