Upscale fashion department store Barneys New York has filed for bankruptcy reorganization, and the owner of Volcom may be interested in buying the brand, according to WWD.
Barneys said in a press release today that it has secured $75 million in financing to help facilitate a sale process and to review its store leases.
According to the Wall Street Journal, the financing is expected to give the retailer two months to find a buyer, or face liquidation.
Authentic Brands Group typically buys the intellectual property of brands and finds new business opportunities for them. According to WWD, ABG CEO Jamie Salter has been close to the Barneys process.
During bankruptcy, Barneys plans to keep its Madison Avenue and Downtown stores open in New York, in addition to stores in Beverly Hills, San Francisco and Boston. Two Barneys Warehouse locations will also continue to operate, as will its e-commerce sites.
The company announced it is closing stores in Chicago, Las Vegas and Seattle in addition to several outlet stores.
Barneys blamed its financial troubles on the challenging retail environment and excessively high rent structures.
A steep rent increase at the Madison Avenue store – from $16 million per year to $30 million – put excessive pressure on the company, according to the New York Times. A slowdown in foot traffic and increased rent at other stores also hurt.
At its height, the Madison Avenue store brought in $300 million in annual sales, but in the last year and a half, sales have been falling, according to the New York Times.
Authentic Brands Group, which bought Volcom in April, owns a wide variety of brands including Sports Illustrated, Frye, Nautica, Spyder, Aéropostale and Juicy Couture.
Other potential buyers are also interested in buying Barneys, but interestingly, no department stores chains have expressed interests yet, the Times reported.
