Barneys New York is filing for Chapter 11 bankruptcy protection, the latest retailer to buckle as shoppers move online and real estate costs soar. The iconic clothier founded almost a century ago will keep the doors open at its 10-story Madison Avenue store, but it has secured $75 million in financing to pay employees and vendors as it seeks a buyer. Stores in Chicago, Las Vegas, and Seattle will close, the AP reports. Twelve concept and warehouse locations will also close, and the company said Tuesday it's reviewing other store leases. Stores in San Francisco, Boston, and Beverly Hills, Calif., will remain open, as well as two warehouse locations in New York and California. It will also have an online presence. Barneys' landlord in Manhattan doubled the rent of its flagship store to nearly $30 million earlier this year.
Barneys' roots date back to 1923, when Barney Pressman pawned his wife's engagement ring and used the cash to open a 500-square-foot men's discount clothing store on Seventh Avenue and 17th Street in Manhattan. His son shifted the company's focus to luxury clothing in the 1960s; it began to expand nationwide in the 1990s. The company's crown jewel, its Madison Avenue location, opened in 1993. "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," says CEO Daniella Vitale. Joseph Aquino, who runs a NYC real estate services firm, says the days of the shop-till-you drop mentality on Madison Avenue are over. "We are in the phase where a lot of younger shoppers ... sit around and buy online and that's what we are fighting against," he says. (Read more Barneys New York stories.)