BEVERLY HILLS—The luxury department store Barneys New York filed for bankruptcy on Monday, August 5, and announced that it is closing 15 of its locations. Only seven stores will remain open including locations in Beverly Hills, San Francisco, Boston and two stores in New York City. Barneys New York in Glendale, Santa Monica and The Grove will be shutting their doors immediately.
According to an employee at The Grove location, employees found out that the store was closing only the night before the bankruptcy announcement and were not told why the stores were closing so fast.
“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 Barneys CEO Daniella Vitale in a statement.
Barneys bankruptcy is consistent with a growing trend of retailers combating rising rents along with strong competition from e-commerce. According to Vitale, filing bankruptcy is a way for the company to restructure and revive their finances.
The company recently received $75 million from Hilco group and Gordon Brothers Group in order to continue operations as they begin bankruptcy proceedings until October, as they work to find a buyer.