6. August (Reuters) – US retail chain Barneys New York Inc filed for Chapter 11 bankruptcy protection to restructure its business and sell, the New York Times reported early Tuesday.
Barneys entered into a $ 75 million additional financing agreement with two companies, Gordon Brothers and Hilco Global, to help it continue to operate while navigating bankruptcy law, according to the newspaper report.
The company plans to close stores at 15 of its 22 locations, including Chicago, Seattle and Las Vegas, as well as most outlets, it added.
For several weeks, Barneys has been looking for a buyer or investor struggling with a crisis due to a steep rise in rents in its Manhattan flagship store on Madison Avenue to about $ 30 million from $ 16 million.
It's on top of the pressure from online stores that have emerged with the rise of Amazon. com Inc and pushed a plethora of traditional brick-and-mortar retailers to the financial brink, or caused them to fail altogether.
However, the Madison Avenue store will remain open, and its nine-floor footprint will also remain the same, the NYT said.
"While difficult decisions have to be made, this process will allow us to reset our financial position and maintain our longstanding supplier relationship," quoted the store's Daniella Vitale, the store's managing director, as saying.  Barneys did not immediately respond to a Reuters request for comment.
Reuters reported in July that Barneys was investigating alternatives, including filing for bankruptcy with the assistance of law firm Kirkland & Ellis LLP.
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