Barneys Inc., a New York-based chain of trendy clothing stores favored by celebrities and the prosperous, filed for bankruptcy court reorganization following a dispute with its Japanese partner.
Barneys said it filed for Chapter 11 to restructure its partnership with Japanese retailer Isetan Co. The closely held retailer also said it plans to sue its partner to recoup more than $50 million it claims was unfairly withdrawn.
The falling-out fractures a six-year-old relationship that bankrolled Barneys’ evolution from a trend-setting New York landmark on lower 7th Avenue to a global chain with 17 stores in such moneyed locales as Oak Street on Chicago’s Gold Coast as well as Beverly Hills, Tokyo and Singapore.
A New York spokesman said none of the stores would be closed, including the Chicago Barneys, which opened in September 1992.
Barneys said Chemical Bank committed to provide $100 million in financing to support operations while it’s in bankruptcy.
Barneys said the two parties could not reach agreement on financing, royalties and trade-name issues.
Industry watchers have long questioned the financial health of Barneys, suggesting that the expansion plans by Gene Pressman, the co-chief executive and grandson of founder Barney Pressman, were too ambitious.
The top five unsecured creditors included Allstate Life Insurance Co., which was owed $25.1 million, according to the filing.
