After filing for bankruptcy earlier this week, legendary department store chain Barneys has received a lifeline in the shape of $218 million from Brigade Capital Management and B. Riley Financial, Footwear News reports.
The financing allows Barneys to pay back the $75 million it received from Hilco Global and the Gordon Brothers Group. The remaining $143 million will allow Barneys to continue operating.
In a statement, Barneys chief executive Daniella Vitale said the cash injection would “better support Barneys New York as we continue to offer a unique customer experience, strengthen our relationships with our vendors, and conduct a sale process to position Barneys New York for the long term.”
News of Barneys' bankruptcy filing broke this Tuesday via The Business of Fashion. The article said that the luxury department store chain, which was founded by Barney Pressman in 1923, had been suffering due to a combination of rising rent prices in New York and fewer visitors to its physical locations. In the last year alone, Barneys has seen its Madison Avenue rent triple.
"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,” Vitale said in a statement reported by Bloomberg.
As a consequence, Barneys filed papers at the US Bankruptcy Court for the Southern District of New York. The papers listed estimated liabilities of between $100 million and $500 million. The Chapter 11 filing, a form of bankruptcy that allows a debtor to reorganize business affairs, debts, and assets, allows Barneys to stay open while it works out a plan of action. With this new cash injection as a starting point, the retailer hopes to turn things around, pay its debts, and resume normal operations.