BARNEYS SEEKS MORE TIME TO PICK STORES FOR CLOSING
NEW YORK — Barneys Inc. has asked the bankruptcy court for more time to decide which stores it might want to close as part of its Chapter 11 reorganization.
Such extensions are usually granted by bankruptcy court.
Barneys will make its case for the extension on March 28.
All 20 stores operated by Barneys, including the three flagships in Chicago, Beverly Hills and on Madison Avenue, are being reviewed by Barneys, though the retailer is not expected to close any of the flagships.
Those three stores are at the center of a dispute between Barneys and Isetan. Isetan claims it is the landlord of the properties and that Barneys owes them rent based on leases. However, Barneys says Isetan is an equity partner. Isetan, a Japanese retail conglomerate, invested $587 million in Barneys’ expansion over the past seven years.
The company said the three flagships should be a part of the extension “in order to preserve such rights in the event this court ultimately determines that the alleged leases are true leases,” according to court papers.
With a big assist from the court-appointed mediator Stephen Case, Isetan and Barneys reached a truce on the rent issue last month, but that truce is set to expire on April 19.
In court papers, Barneys said it continues to honor the temporary settlement with Isetan, paying roughly half of the rent it owes to Isetan.
David Wiltenburg, an attorney for Isetan, told WWD Thursday he has not yet decided whether he will support or oppose Barneys’ request for additional time.
Since filing for Chapter 11 on Jan. 10, Barneys said it has been devoting “substantial time and effort to implementing a business plan that will provide the cornerstone” for reorganization.
The retailer also spent at least three weeks choosing a Chapter 11 veteran to help it through its reorganization. Barneys reportedly decided Wednesday to retain John Brincko, a Los Angeles-based turnaround specialist, and is expected to seek court approval of the hiring next week. Among other duties, Brincko will help Barneys formulate the business plan.
Until that plan is complete, however, Barneys said it will not be able to determine “whether it is economically prudent to assume certain leases.”
— Fairchild News Service