Barneys went bankrupt — here’s why you should care

Caroline Hendrix, Contributing Writer

New Yorkers are shocked to hear about the closing of Barneys, a well-known Manhattan department store that has blessed Madison Avenue with its presence since its opening in 1993. How could this happen? Barneys was not only a hotspot for New Yorkers, but also for tourists who traveled across oceans to shop until they drop or ogle at the intricate window displays. It is thus no surprise why many are troubled by the recent news of the company’ s bankruptcy, but they need to realize that Barneys is far from being erased from the culture of New York City.

Barneys, like many stores with New York City locations, has to withstand increasing rent prices. It is no secret that living in New York City is far from cheap, and this does not exclude businesses. Stores like Barneys survive off of the profit of consumers and partnerships with other brands to pay off their sky-high rents. According to the New York Times, the soaring rent prices could have contributed to Barneys’ downfall, as well as their inability to adapt to the modernization of company to consumer relationships. As online shopping has become more and more popular, especially with companies like Amazon, could it be that Barneys has failed to effectively jump on the bandwagon of other brands offering their products online as well as in-store? 

Barneys filed for bankruptcy in August of 2019 and is now under the control of Authentic Brands Group. The company was hoping for another potential buyer until the last second before the closing, and while Kith investor Sam Ben-Avraham showed promise, nothing came through and hope for a saving grace was lost, says CNBC. New Yorkers are not only concerned about what will happen to the company, but they are also curious as to what will happen to the building on Madison Avenue that housed the famous Barneys New York flagship store for so many years.

According to CNBC, the flagship store will remain open for at least one more year while negotiations are being made with the buildings’ landlord. In the meantime, shoppers are welcome and encouraged to stop by for some heavy holiday shopping, which will hopefully lessen the company’s inventory. But, after that year, no one really knows for sure the fate of Barneys. Even though Barneys has gone bankrupt, it is clear that New York City is not willing or ready to let it go. The New York Times has reported that through deals with Authentic Brands Groups, Saks Fifth Avenue – a competing department store chain – will be opening a modified Barneys New York on the fifth floor of their flagship store.

So, shoppers do not have to be too upset: Barneys New York is still open and running; even if its flagship store closes, it will still have a presence thanks to Saks. But, the bankruptcy of the company should open eyes and ears – if for some reason they have not been opened already – to the difficulties of keeping a brick and mortar company alive and thriving, especially in an expensive city setting. If even the famous Barneys New York cannot stay economically afloat, then what does this mean for businesses who also have to endure soaring rents and must adapt to a future of online shopping?

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