04 Dec 2022
DiamondWorld Directory
Home |
Barneys New York bankruptcy: Another luxury retailer bites the dust
CEO Daniella Vitale cited the changing retail environment, sky high rent structures along with muted demand from consumers that led to its fall.
By: Diamond World News Service
Sep 9 2019 12:09PM
Reference: 22480  


In a shocking announcement, Barneys New York is the latest retail giant to succumb to the insurmountable pressure of luxury retail as it filed for bankruptcy on 6th August.  Continuing its global domino effect, popular brands like BCBG Max Azria, Diesel, Roberto Cavalli and many more have folded; shutting down their brick and mortar stores across cities.  Barneys filed for chapter 11 bankruptcy which allows the brand to continue operating while it executes a reorganization plan. CEO Daniella Vitale cited the changing retail environment, sky high rent structures along with muted demand from consumers that led to its fall.  

The opulence and grandeur of a luxury brand is evident in its prime location at metropolitan cities such as New York’s Madison Avenue or London’s Bond Street making them global institutions. A brand like Barneys is as iconic to New York City as Times Square. The rent at its Madison Avenue flagship alone skyrocketed from roughly $16 million to about $30 million in January 2019, draining nearly all its earnings before interest, taxes and depreciation.

The luxury retail space has seen a significant shift from in store sales to online sales with each brand offering e-commerce services through their respective websites. Having arrived late to the party, luxury brands are now trying their level best to catch up to the global digital revolution. LVMH, parent company of world renowned handbag brand Louis Vuitton, launched its own multi-brand website known as 24 Sevres while maintaining separate websites for its house brands. Barneys too was able to expand its online sales to $200 million from $18 million since February 2017.

With the emergence of multi brand platforms like Shopbob, Moda Operandi and Net-a-Porter, high end brands prefer to showcase their products as it eliminates overhead costs while directly targeting their consumers. A Consumer Insight Report published by Deloitte reveals that millenials, which account for 83.1 million people, have made the switch to online shopping.

Changing cultural tides too have posed a serious threat to retailers. Capgemini defines the High Net worth Individual (HNWI) as those with investible assets of $1 million or more, excluding primary residence, collectibles, consumables and consumer durables. As the rich get richer, there is a glaring divide between the rich and poor across the globe. Luxury is no longer defined by expensive products or flashy cars. Instead, new age millionaires prefer to live a more subdued and low-key existence. Privacy and security have become the new keywords that now define well heeled individuals which makes it even more difficult for luxury brands to establish a connection with them. The rise of conscious and mindful spending on experiences rather than products has put luxury retail brands on the back foot.    

Follow DiamondWorld on Instagram: @diamondworldnet
Follow DiamondWorld on Twitter: @diamondworldnet
Follow DiamondWorld on Facebook: @diamondworldnet
Have Your Say
* Your view
* Name:
* Email:
* Town/city:
* Country/State:
*  Company:
*  Name:
*  Mobile:
*  Email:
Subscribe for DiamondWorld weekly Newsletter
Search News by City
Recent Issue
News in Pictures
Young Diamantaires
Pictures: 16
Stunning Jewellery from Cannes 2019
Pictures: 24
Sparkly Jewels at Oscars 2019
Pictures: 19
Golden Globes 2018
Pictures: 15
Spotted: Who Wore What (December 2018)
Pictures: 4
India Diamond Week
Pictures: 8
Spotted: Who Wore What (October 2018)
Pictures: 7
Spotted: Who Wore What (September 2018)
Pictures: 6
70th Emmy Awards
Pictures: 11
35th India International Jewellery Show 2018
Pictures: 46
JJS - IJ Jewellers Choice Design Awards 2015 powered by GIA
Views: 32005
Diamond World Expert Hour with Evgeny Agureev, Deputy CEO, ALROSA
Views: 9502
GJEPC Chairman Interview
Views: 28114
IJ Jewellers Choice Design Awards 2012 - Part 1
Views: 39344
Promo for IJ Awards 2012 at NDTV Profit
Views: 57052
IJ Jewellers Choice Design Awards 2012- Part 2
Views: 68546
Couture India 2016 - A Business Boutique Show by IJ Magazine
Views: 21870
Savjibhai Dholakiya, Surat Businessman (Diamond Merchant) speaks in Vibrant 2015
Views: 50910
IJ Jewellers Choice Design Awards 2013 - NDTV Video
Views: 53086
DW News App
Member of:
Supporter of: