According to a filing on Wednesday in the U.S. Bankruptcy Court in the Southern District of New York, the luxury retailer has designated the brand management company as its stalking-horse bidder following weeks of speculation about potential suitors that could help pull it out of bankruptcy. In the interim (the past couple of days), it had been working to finalize an official bid with debtor-in-possession lenders during the Chapter 11 process.)
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As part of the deal, all of Barneys’ seven stores would be slated for closing, including its storied Madison Avenue flagship that spans 265,000 square feet and 10 floors. (The department store chain also has two other locations in New York as well as three in California and one in Boston.)
Court documents stated that all bids must be received no later than Oct. 22, with a bankruptcy auction to be held on Oct. 24. FN has reached out to Barneys for comment.
The retailer could still pursue other options leading up to its auction. Last week, reports suggested that Liberty Fairs trade show owner Sam Ben-Avraham had proposed a deal to buy Barneys but the supposed offer reportedly fell apart.
Barneys filed for Chapter 11 bankruptcy protection just over two months ago but managed to secure $218 million in financing that allowed it to maintain operations. The retailer has struggled amid skyrocketing rents and shifting consumer demands that have weighed heavily on its margins, particularly in its hometown of Manhattan where the Madison Avenue flagship has been housed for nearly a century.
Over the past month or so, the high-end chain shuttered units in Las Vegas, Chicago and Seattle, and it closed some warehouse locations and smaller concept stores as part of its restructuring plan. Barneys has managed to continue paying employee wages and honoring customer orders as it works toward meeting its financial commitments.
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