Luxury Department Store Barneys Files for Bankruptcy

Luxury Department Store Barneys Files for Bankruptcy

The luxury department store chain Barneys has filed for bankruptcy. Besides the Chapter 11 filing, the company has announced that 15 of its stores nationwide will shut down.

According to the Wall Street Journal, "the Barneys case took a detour Tuesday afternoon in bankruptcy court, when the company’s lawyer, Joshua Sussberg, said investment bank B. Riley Financial Inc. and Brigade Capital Management LP, a hedge fund that focuses on distressed debt, would provide the retailer a $218 million bankruptcy loan with more favorable terms. That loan would replace a $75 million loan from Hilco Global and Gordon Brothers Retail Partners LLC, which the company obtained ahead of the bankruptcy filing, Mr. Sussberg said."

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The new loan is expected to fund the company’s stay in bankruptcy until the end of October as it looks to clinch a deal with a buyer, Sussberg said at a hearing Tuesday afternoon in U.S. Bankruptcy Court in Poughkeepsie, N.Y.

The bankruptcy news comes after it was revealed that CEO Daniella Vitale has been unable to find a buyer.

Affected locations include Barneys stores in Las Vegas and Chicago. At least seven warehouses affiliated with the luxury chain will also be closed. Stores that will remain open include the Barneys on NYC's Madison Avenue and ones in San Francisco and Beverly Hills.

According to 'The New York Post,' the company's online platform, Barneys.com, will also not be taken down. Neither will fellow website BarneysWarehouse.com.