L.A. financiers are jumping in to help luxury retail chain Barneys stay in business.
New York-based Barneys New York Inc., which filed for Chapter 11 bankruptcy protection on Tuesday, has received $218 million in new financing from lending arms of Woodland Hills-based B. Riley Financial Inc. and Brigade Capital Management.
The financial commitment will help Barneys strengthen relations with its vendors and conduct a sale process to better position the luxury retailer for the long-term, said Daniella Vitale, the retailer’s chief executive officer and president.
The funding will serve to keep the doors open at the retailer's flagship locations in Beverly Hills, San Francisco, New York and Boston, and keep Barneys.com, BarneysWarehouse.com and select outlets up and running.
B. Riley and Brigade Capital, a New York-based global alternative asset manager, offered a financial rescue package that replaced a deal approved earlier Tuesday by the U.S. Bankruptcy Court for the Southern District of New York.
The earlier deal offered $75 million from lending affiliates of Northbrook, Ill.-based Hilco Global and Boston-based Gordon Brothers Group to help Barneys meet its financial commitments.
The B.Riley-Brigade Capital financial package, which was approved late Tuesday by the bankruptcy court, allows Barneys to immediately access $75 million of the $218 million in new financing.
Barneys struggled financially because it could not afford rents on locations that lost foot traffic to online shopping, leaving nearly $10 million in unpaid rent to its major landlords.
The bankruptcy filing gives the company the ability to look for a buyer, review current leases and optimize operations, according to Barneys’ Vitale.
Finance reporter Pat Maio can be reached at firstname.lastname@example.org or (323) 556-8329. Follow him on Twitter @patmaio.
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