Barneys may close all of its stores
NEW YORK - Luxury goods chain Barneys, which has been in business since 1923, may close all of its stores including its flagship Manhattan store if it can't find a buyer by Oct. 24.
The retain chain reached a tentative deal Wednesday with Authentic Brands Group LLC and investment firm B. Riley Financial Inc. to sell its assets at just over $271 million.
In August, Barneys announced it had filed for Chapter 11 banruptcy protection after the landlord of the flagship store raised the annual rent to nearly double at $27.9 million.
"Like many in our industry, Barneys New York's financial position has been dramatically impacted by the challenging retail environment and rent structures that are excessively high relative to market demand," said CEO Daniella Vitale.
The iconic clothier founded almost a century ago kept the 10-story store opened after it secured $75 million in financing to pay employees and vendors while it sought a buyer.
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If no competing bidders come forward by Oct. 22, the deal would go forward, reported the Wall Street Journal.
In a statement to FOX 5 News, Barneys said: "We are working hard to achieve a successful sale process that will preserve the integrity of this incredible brand and ultimately benefit our employees, customers, vendors and other business partners."
The company's crown jewel, its Madison Avenue location, opened in 1993, two years before Amazon initiated operations as an online bookstore. Joseph Aquino, who runs a real estate services firm under his name in Manhattan, says the days of the shop-til-you drop mentality on Madison Avenue popularized by the HBO popular series of the 1990s "Sex in the City" are over.
"She was 45 and now she is 65... She isn't shopping like she was 45," Aquino said. "We are in the phase where a lot of younger shoppers don't want to go the high street. They sit around and buy online and that's what we are fighting against."
With the Associated Press
This story has been updated to remove incorrect information that the flagship store was definitely going to close.