Barneys New York, the luxury specialty retailer, announced that it has secured $75 million in new capital to facilitate a going concern sale process. In connection with the sale process, Barneys New York has voluntarily filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. Barneys New York intends to use the court-supervised process to review store leases to best optimize the Company's operations and consider all value enhancing transactions.
"For more than 90 years, Barneys New York has been an iconic luxury specialty retailer, renowned for its edit, strong point of view, creativity and representation of the world's best designers and brands," said Daniella Vitale, Chief Executive Officer & President. "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. In response to these obstacles, the Barneys New York Board and management team have taken decisive action by entering into a court-supervised process, which will provide the Company the necessary tools to conduct a sale process, review our current leases and optimize our operations. While doing that we are receiving new capital to help support the business. Pursuing a sale under the Court's supervision provides the quickest and most efficient means of maximizing value while ensuring we continue serving both new and loyal customers."
"I would like to express my deep appreciation and profound gratitude for the continued support of our employees, vendor community and customers – truly the lifeblood of Barneys New York. Our decades-long partnerships and relationships will continue for many years to come. We are unwavering in our commitment to executing our forward thinking vision on what retail should look like today."
Barneys New York will continue to serve customers in five flagship locations: Madison Avenue, Downtown NYC, Beverly Hills, San Francisco and Copley Place in Boston, as well as two Barneys Warehouse locations, including Woodbury Common and Livermore. In addition, Barneys.com and BarneysWarehouse.com will continue serving our customers without disruption.
As a part of the Chapter 11 process, Barneys New York will close its physical store locations in Chicago, Las Vegas and Seattle, in addition to five smaller concept stores and seven Barneys Warehouse locations.
Barneys New York has secured $75 million in new capital from affiliates of Hilco Global and the Gordon Brothers Group, which, combined with operating cash flow, will help Barneys New York to meet its go-forward financial commitments. The debtor-in-possession lenders, together with their separate retail operating units which have been engaged to provide certain inventory related services, have broad and deep expertise in all retail sectors, offering a wide range of analytical, advisory, asset monetization and capital investment services backed by their own capital. Their top priority is optimizing asset value recovery while maintaining brand value and goodwill.
Ben Nortman, Executive Vice President of Hilco Global said, "We are pleased to partner with Barneys New York as it takes this proactive step to conduct a value maximizing sale process. We are investing in Barneys because we believe that it is an iconic retail brand. We look forward to working with the team to achieve the best outcome for all stakeholders."
In conjunction with the Chapter 11 filing, the Company has filed a number of customary motions seeking authorization to support its operations during the court-supervised process, including authority to continue payment of employee wages and benefits and honor customer payments and orders. The Company expects to receive court approval for these requests. The Company expects to pay trade vendors, manufacturing partners and suppliers in full for goods and services provided on or after the filing date.