Barneys New York Inc., the upscale clothing retailer with once-famously haughty sales people, has found humility.
After filing for bankruptcy Tuesday, the monument to high fashion said it would rein in its ambitions, closing 15 of 22 stores from Chicago to Las Vegas to Seattle. The victim of high rents and online competition, Barneys said it secured $218 million in financing and will continue to operate until it finds a buyer.
The bankruptcy marks the culmination of a long fall for Barneys, now owned by hedge fund manager Richard Perry. Yet its preliminary plans signal a new, more modest approach from the last time it went bust, in 1996. After closing a few boutiques then, it emerged from protection three years later and began expanding across the country anew. But it never replicated the success from its heyday in the 1970s and ‘80s. Barneys has cycled through a handful of chief executive officers and ownership bounced around repeatedly over the past two decades, with each new buyer searching for ways to keep the stores thriving.
This time, Barneys plans to focus on the cities where it fares best. It will keep open its Madison Avenue and downtown location in Manhattan and retain stores in Los Angeles and San Francisco. And unlike two decades ago, Barneys has an e-commerce business that, while late to the game, may be able to reach shoppers distant from a store.
“It’s clear the direction that they’re taking going forward is reeling down their real estate,” said David Silverman, senior director at Fitch Ratings. “Certainly the stores that they’re keeping are in the most densely populated areas and they’re keeping the ones that are in fashion markets.”
“No Bunk, No Junk, No Imitations.”
The retail landscape–and Barneys itself–has changed dramatically since it first opened up shop in 1923, of course. The first Barneys New York store was a 500-square-foot boutique that sold discounted suits to buttoned-up salesmen in downtown Manhattan. Shopkeeper Barney Pressman combed through auctions and bankruptcy sales to find the best garments to sell at lower prices than his rivals. His original slogan: “No Bunk, No Junk, No Imitations.”
Barneys’s glory days began in the 1970s when it transformed into a luxury department store. Discount suits were replaced with high fashion from prominent European designers such as Giorgio Armani and Hubert de Givenchy. To court Wall Street shoppers, it opened a men’s store in the World Financial Center, a few blocks away from the stock exchange and surrounded by the offices of New York’s big banks.
The original location is now home to a 58,000-square-foot Barneys full of dresses and gowns worthy of runways in Paris and Milan. For businessmen in search of a suit, there are $3,250 two-buttons from Ermenegildo Zegna and $7,000 virgin wool basket-weave ensembles from Brioni.
Barneys opened its biggest store in 1993, a Madison Avenue flagship with the location and sheer size to battle its high-end department store competitors. At the time, it was the city’s largest store opening since the Great Depression. Celebrity fans would talk up the store’s glitz and glam, attracting shoppers over the years from Britney Spears and Kim Kardashian to Sarah Jessica Parker.