At least give them this: Barneys New York is right on trend. Amid a spate of retail closings and bankruptcies, the high-end chain filed chapter 11 this week, partly precipitated by a gigantic rent increase at its splashy Manhattan flagship.
For the iconic fashion name with Jewish roots, it’s a sad development - and possibly the end of the line for a retailer with roots in Manhattan’s schmatte trade.
There’s also a Jewish twist to the store’s current woes. The Barneys flagship store on Madison Avenue is owned by Ben Ashkenazy of Ashkenazy Acquisition Corp., whose portfolio reportedly includes more than 100 New York City buildings. Ashkenazy plans to raise Barneys’ rent from $16 million to $30 million annually. The developer’s net worth has been estimated at about $7 billion; he made headlines in 2016 for hiring Drake to perform at his daughter Gigi’s bat-mitzvah.
Launched by Barney Pressman in 1923, the store began as a 200-foot “hole in the wall” on Seventh Avenue at 17th Street, according to Ephemeral New York. Pressman had pawned his wife Bertha’s wedding ring for capital to open the store.
According to his New York Times obituary, Pressman was one of seven siblings growing up on Elizabeth Street on the Lower East Side of Manhattan, and started pressing pants for 3 cents a pair in his father’s clothing store.
The store’s origins couldn’t get any further from today’s ultra-high-fashion emporium, where, say, a spangled St. Lauren wool Teddy jacket goes for $10,000.
“Barneys was once bargain basement Barney’s, a menswear store openly hawking factory rejects, auction stocks, and showroom models,” Ephemeral New York wrote. A promotional matchbook touted Pressman as “The Cut Rate Clothing King”.
In the 1960s, Barney’s son Fred Pressman began a shift toward luxury goods that would come to define the brand as a global fashion icon. Barneys New York began a national expansion in the 1990s. But as buyers migrate online for even top-end purchases, most of those locations became a millstone for the company - and 15 of them will close as part of the bankruptcy filing. Store closings include Philadelphia, Chicago, and Brooklyn, NY.
Barney Pressman died in 1991; the Pressman family’s no longer involved in the business. Now controlled by New York hedge fund Perry Capital, Barneys listed more than $100 million in debt and more than $100 million in assets in its bankruptcy filing in the Southern District of New York, according to the Associated Press.
The AP also reported that the number of retail stores closed in the U.S. this year has already surpassed last year’s total; nearly 7,600 retail stores have closed so far this year, compared with 5,864 in all of 2018.
“Like many in our industry, Barneys New York’s financial position has been dramatically impacted by the challenging retail environment and rent structures that are excessively high relative to market demand,” said CEO Daniella Vitale told the AP with tasteful understatement.