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Barneys Heading For Bankruptcy?

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Luxury specialty retailer Barneys New York Inc. may become the latest retailer preparing for bankruptcy filing.

Reuters reported Saturday, citing people familiar with the matter that Barneys is exploring options, including a bankruptcy filing.

The company is reportedly struggling with expensive leases hurting its business, especially its flagship department store on Madison Avenue in Manhattan. Barneys opened the store there in 1990.

In addition, the change in consumer tastes has caused lower sales and also weighed on Barney's business.

Barneys has not yet made a final decision on bankruptcy protection, the report said.

Barneys operates flagship stores in New York City, Beverly Hills, Chicago, Seattle, Boston, San Francisco and Las Vegas, along with a preeminent luxury online store, Barneys.com. The retailer also has sixteen other full-price stores and warehouse stores across the U.S.

Luxury retailers have primarily focused on upscale locations in New York to attract wealthy consumers and tourists.

However, some of them are now struggling as shoppers increasingly shop online and the retailers continue to pay for expensive leases at these prime locations. Stiff competition from online retailers has also piled up the pressure on brick-and-mortar retailers.

In 2017, Ralph Lauren had closed its Fifth Avenue store, while Lord & Taylor closed its flagship store on Fifth Avenue in January. Apparel retailer Gap Inc. too shuttered its Fifth Avenue store in January.

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