MANHATTAN — Is Barneys on the brink of bankruptcy again?
Sources said the luxury retailer has hired the law firm Kirkland & Ellis LLP, which specializes in bankruptcy and restructuring, the Wall Street Journal reported Wednesday.
Barneys did not directly comment on the matter, but a spokeswoman issued a statement saying the company "is actively engaged in discussions with the company's small group of lenders to improve its balance sheet," according to the Journal.
For fashionistas looking forward to the next Barneys warehouse sale, opening Feb. 16, there's no need to worry.
Barneys' spokeswoman added: "It will remain business as usual at Barneys New York."
The upscale store, which has 39 shops across the country, had a "record" December, with sales up 18 percent, the spokeswoman told the paper.
Barneys went all-out for the holidays at its Madison Avenue flagship store with Gaga's Workshop, a collaboration with the pop sensation Lady Gaga, who filled 5,500 square feet of the men's department with hologram nail polish, chocolate skulls, wing-shaped eyelashes and other wild and weird gifts, some of which are still available.
The company, founded in 1923 as a discount store, has faced problems before. It filed for Chapter 11 in 1996. It toyed with filing for bankruptcy again in 1999, and Istithmar, the investment arm of state-owned Dubai World, which now owns the retailer, considered selling. Instead, supermarket mogul Ron Burkle bought a large portion of Barneys' debt, the Journal reported.
Hiring Kirkland doesn't automatically mean Barneys plans to file for bankruptcy, the Journal noted. The firm is also known for helping companies explore options such as raising new debt or restructuring old debt.
Kirkland has advised the auto parts supplier Lear Corp. and United Airlines, the Journal said.
