Luxury retailer, known as Barneys New York, has got a new boost of $50 million in credit which is like a new lifeline for the Luxury retailer and department store chain owner. The move has extended the credit line of the company to 50 million dollars, which will provide the scope of growth for the Luxury retailer; it will also help in creating liquidity which is vital for withstanding the new industry challenges and the recent rent hike at its well known New York flagship, according to the sources.
The rent was increased to $30 million in the month of January which was previously $16 million which had a disastrous impact on the company’s EBITDA margin. Barney tried to delay the hike in rent price but could not succeed in doing so. However, the company said that it projects positive EBITDA margins for the current year and beyond.
The negative reports coming in the media about Barneys is that it is planning to close its Madison Avenue Store. However, a company’s spokesperson said that Barneys has no such plan. The financing has come under as an extension of current credit agreement of Barneys with Wells Fargo. A new lender has also been added to the company with the name of TPG Sixth Street Partners, which is a private equity firm and deals in long term oriented type of fund with net assets of $30 billion.
The company has recently announced that it will be selling high-end cannabis items in the stores. Barney’s along with other peers in the industry is facing a stiff competition from the online shopping brands which are trying to directly sell to their customers. Barneys has introduced famous designers such as Giorgio Armani. The CEO of the company is its former COO, known as Daniella Vitale.