Barneys Bankruptcy News Not Surprising – But Upscale Retailer Likely To Survive

Today, the New York-based retailer Barneys filed for Chapter 11 bankruptcy protection. In a statement, the high-end retailer said the filing will allow the company with the necessary tools “to conduct a sale process, review current leases and optimize operations.”

Ray Wimer is an assistant professor of retail practice at Syracuse University’s Martin J. Whitman School of Management.

Wimer says:

“I’m not surprised by the news that traditional retailers, like Barneys, that have a heavy debt load and little financial flexibility to respond to the rapid change in the industry, are headed towards bankruptcy. I believe the good news for Barneys is that it can survive as a smaller niche department store with two locations in NYC and Beverly Hills.

“Iconic brands will continue to struggle like JC Penny. If their new management team’s strategy doesn’t work, they will be looking to go down this route next year.

“What makes matters worse for struggling retailers is the likelihood of a prolonged trade war with China. All retail stock went down on the news of a new deadline over the weekend, and it looks like China will not be backing down.”

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