It’s the Last Black Friday for Bankrupt Barneys

(Bloomberg) -- There’s little to cheer about at the Barneys New York flagship store on Madison Avenue this holiday season. Even the promise of a liquidation sale struggled to excite shoppers.

Some two dozen people huddled on the cold Manhattan sidewalk Friday morning, waiting for the doors to open for the traditional beginning of the holiday shopping season. Instead of ambitious window displays, though, a few mannequins stood next to signs declaring “Everything must be sold!” Inside, large screens broadcast the terms of the sale while employees fielded questions on the compounding discounts from shoppers. 

“See, like this one,” an employee said, pointing to a men’s puffer jacket. “You take 15% off, then another 15%.”

One woman was incredulous. “This is so weird,” she said. “So weird!”

Barneys was once adored by those who could afford to shop there, a group that included New York’s high-society set, celebrity visitors and Sex and the City’s Carrie Bradshaw. On Friday, it looked more like a RadioShack in its final days as shoppers plucked discount goods from racks and shelves. Even some of the escalators were broken.

Almost every item was offered at a discount, and all sales were final. The markdowns reach 30 to 35% on average, according to a representative for B. Riley Financial, the firm handling the inventory sale.

While such discounts are impressive, it was the goods on offer that set this going-out-of-business sale apart. Most clearances are limited to leftovers from previous seasons that a retailer wasn’t able to sell at full price. Yet at Barneys, prices were slashed on even the newest products.

Balmain blazers and Prada sweatshirts were an extra 20% off the lowest listed price, with some marked down even further. Entire sections of Balenciaga and Commes des Garcons were available with similar discounts. Online, a $2,578 pair of Tom Ford leather sandals went for $603. 

A liquidation of luxury goods at this scale is unprecedented, and may send ripples across the luxury market as Barneys undercuts rivals. A notable exclusion to the sale however were brands owned by European luxury conglomerate LVMH. There weren’t any shoppers perusing the Givenchy section—where everything remained full-price. 

The storied New York retailer’s sordid finale brings it full circle, given its lowbrow beginnings.

The very first Barneys opened in 1923 as a tiny downtown Manhattan boutique, selling discounted suits that shopkeeper Barney Pressman acquired through auctions and bankruptcies. The store didn’t become a luxury emporium until the 1970s when it began seeking out wealthier clients with upscale European designer garments.

The flagship Barney’s in Manhattan should stay open through the holiday season and into 2020, as the company tries to get rid of as much inventory as possible, according to a person familiar with the matter.  

But at some point next year, the Madison Avenue store will finally close. The name, however, will live on. Licensing firm Authentic Brands Group bought the intellectual property and plans to bring the Barneys brand into its longtime rival, Saks Fifth Avenue, as a small section within the department store chain. The old store will be used as a “pop-up retail experience,” ABG said in a press release.

The two brands already share clientele. At Barneys on Black Friday, one woman pushed a baby carriage through the store, stopping to look at the 40%-off fine jewelry. Inside her stroller sat a fluffy white dog and a shopping bag from Saks.

--With assistance from Lauren Coleman-Lochner.

To contact the editor responsible for this story: Joshua Petri at jpetri4@bloomberg.net

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