Bankruptcy is the new black... Among department stores, Barneys was the fancy NYC option with just 22 locations and a cooler-than-us kind of vibe. It's a private company controlled by a hedge fund — now it's shutting 15 stores to enter Chapter 11 bankruptcy (Barneys' biggest locations will keep the doors open while a judge figures out what to do with it).
Makeover... Barneys has been here before, going through bankruptcy in the '90s. But if it re-emerges from bankruptcy (again), it will do so promising to focus on "experiences." You know, because us Millennials love experiential experiences. Barneys says it's adding more in-store restaurants and "entertainment," but we haven't heard what that includes exactly.
But do you own the real estate?... Barneys' core problem is that it didn't. Last year, the rent at Barneys' flagship Madison Ave. store jumped to $2.5M/month. Those costs can kill if you don't own the land. Meanwhile, rival Saks Fifth Ave may be suffering from the retail-pocalypse too, but it owns most of its stores (including the iconic 5th Ave. spot) — so it's benefiting from the price-pocalypse of rising real estate values.