Barneys New York Inc. just received a $218 million helping hand.
The storied retailer, which filed for bankruptcy on Tuesday, has secured new financing from Brigade Capital Management LP and B. Riley Financial Inc. The offer will allow Barneys to pay out the $75 million it received from Hilco Global and the Gordon Brothers Group, with the remaining $143 going to continuing operations as the beleaguered company seeks a new buyer.
In a statement, CEO and president Daniella Vitale wrote that the financial infusion 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.”
The company was given approval from the United States Bankruptcy Court for the Southern District of New York for all of its “first-day” motions filed yesterday, when it can gain immediate access to the $75 million in financing to meet its go-forward financial commitments.
The court also granted Barneys the authority to continue paying employee wages and benefits as well as honoring customer orders.
A Manhattan institution for nearly a century, Barneys filed for Chapter 11 bankruptcy protection after skyrocketing rents and changing consumer demands weighed heavily on its margins. Early this year, its annual rent bill reportedly rose dramatically to upwards of $44 million, particularly at its flagship store on 660 Madison Ave. in New York.
The filing is expected to help the company “conduct a sale process, review our current leases and optimize our operations” as it works to streamline the business. As part of the move, Barneys plans to close 15 stores across Chicago, Las Vegas and Seattle; five additional concept stores; and seven Barneys Warehouse locations. (However, a new outpost is slated to open in the fall at the American Dream mall in East Rutherford, N.J.)
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