BARNEYS BUSTING OUT. If Barneys can’t reach a deal, it will likely have to liquidate. By Todd Horwitz, Bubba Trading.


Barneys Near Bankruptcy Barneys New York is preparing to file for bankruptcy as soon as Monday evening, according to people familiar with the matter. The embattled luxury department store chain is nearing an agreement with lenders that would secure it enough financing to give it time to find a buyer, the people said, asking to remain anonymous because the discussions are private.

Barneys is close to a deal with Gordon Brothers and Hilco Global, firms that specialize in selling assets for distressed companies, they said. A deal would give Barneys 60 days to try to find a buyer in bankruptcy court, one of the people said. If Barneys can’t reach a deal, it will likely have to liquidate.

“The Barneys New York board and management continue to work constructively and collaboratively with a number of parties and are committed to reaching a mutually agreeable resolution to strengthen our business,” a Barneys spokesman said Monday.

Barneys is much smaller than rivals Saks Fifth Avenue and Neiman Marcus, which each operate about 40 department stores. Barneys is carrying approximately $200 million in debt, the people said.

The retailer, controlled by the New York hedge fund Perry Capital, struggled to navigate the rise of e-commerce as well as a steep rent hike for its flagship store in Manhattan. The rent nearly doubled this year to $27.9 million from $16.2 million. Barneys fought the rent increase but lost during an arbitration proceeding earlier this year, prompting the retailer to hire restructuring advisers.

Barneys’ existing lenders Wells Fargo & Co. and TPG Sixth Street Partners, a credit investor partly owned by private-equity firm TPG, are in discussions to allow the company to take the junior loan from Gordon and Hilco, the people said. Talks are still fluid and the deal could fall apart or change, the people said. A number of potential buyers have been circling the iconic chain, some of the people said.

Todd “Bubba” Horwitz

Financial Markets and Political Commentary


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About the author

Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.