Barneys New York, the luxury-goods retailer controlled by a Dubai investment company, said it’s in talks with lenders to improve its balance sheet.
“Barneys New York is actively engaged in discussions with the company’s small group of lenders to improve its balance sheet and further position Barneys New York for sustainable, long-term growth and success,” the company said today in an e-mailed statement. “We are focused on resolving this matter as expeditiously as possible, and it will remain business as usual at Barneys New York.”
Since the recession, Barneys has suffered from the absence of so-called aspirational shoppers, said Candace Corlett, president of WSL Strategic Retail, a New York retail consulting firm. Chief Executive Officer Mark Lee has made no discernible changes to the format in his 18-month tenure, she said.
“The aspirational shopper has sort of had her wings clipped,” Corlett said. “In an era in which people are just being more cautious even about their expensive buys, Barneys is in a sticky situation. It’s fun, it’s high-energy, it’s trendy, but it’s too frivolous for these times.”
Beth Orr, a Barneys spokeswoman, didn’t immediately return a voicemail and e-mail seeking elaboration of the statement.
The Wall Street Journal reported earlier today that the store had hired Kirkland & Ellis LLP as restructuring and bankruptcy counsel, citing people familiar with the matter. The hiring doesn’t mean Barneys plans to file for bankruptcy or that a restructuring is coming soon, the Journal said.
Kate Slaasted, a Kirkland & Ellis spokeswoman, didn’t immediately return a call and e-mail for comment.
Istithmar World PJSC bought Barneys for $942.3 million in 2007 from Jones Group Inc. Dubai World, a state-owned holding company, controls Istithmar.
Barneys hired Lee, 48, in 2010 to become the first CEO since Howard Socol resigned in 2008. Lee previously ran luxury brands Gucci and Yves Saint Laurent, where he was credited with adding new retail outlets and increasing sales. He also worked at Armani and Jil Sander.
There are nine Barneys New York stores and 17 Barneys New York CO-OP stores. The luxury retailer sells fashions by designers ranging from Givenchy to 7 For All Mankind.
Founded by Barney Pressman as a cut-rate men’s suit store in 1923, the company began building up women’s lines in the 1970s. It exited bankruptcy protection in 1999 and was bought by Jones for $294.3 million in 2004.
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