The Barneys Bankruptcy and the Future of Luxury Retail

The New York icon Barneys was sold today in bankruptcy proceedings, signaling the end of an era in luxury retail. Founded in 1923, the company had weathered nearly a hundred years in business and had built a name for itself as a leading retailer of edgy urban luxury clothing. 

The company faced several challenges over the past few years, including a challenging retail climate overall, rising real estate expenses and changing consumer buying patterns. In a world where more up-and-coming brands are able to market and sell directly to consumers online, upstart brands that Barneys brought to market are finding new ways to reach their customers directly, without needing to visit a physical store. Barneys is not alone in these challenges; Henri Bendel closed all of its stores, including its flagship Fifth Avenue location earlier this year, after 123 years in business. The parent company of Lord & Taylor recently sold its flagship Fifth Avenue property to WeWork earlier in this year. 

While this may seem surprising, given the growth of e-commerce, the importance of influencer marketing and changing consumer buying preferences, this evolution is all but inevitable. As consumers are able to discover the "long-tail" of niche brands on their own and buy directly from brands and retail platforms online, they no longer need to take the trip to a physical store to discover new brands or pieces. Free shipping, seamless online shopping and checkout experiences and quick delivery times reduce the friction of buying online. At the same time, new purchasing patterns are emerging, with consumers experimenting with subscription services such as Le Tote and Rent the Runway, or opting for vintage luxury shopping experiences on platforms such as The Real Real. 

Barneys made a name for itself in its day by being a cutting edge, creative trendsetter, embracing up-and-coming luxury designers and raising the bar for its peers. Looking forward, a new generation of retail is emerging and adapting to the new digital retail landscape while continuing to innovate.