© Reuters. The Barneys New York sign is seen in a display window outside the luxury department store in New York

(Reuters) – U.S. luxury department store chain Barneys New York Inc filed for Chapter 11 bankruptcy protection to restructure its business and pursue a sale, the New York Times reported early on Tuesday.

Barneys struck a deal for $75 million in additional financing with two firms, Gordon Brothers and Hilco Global, to help it keep operating while it navigates bankruptcy court, according to the newspaper report.

The company plans to close stores in 15 of its 22 locations, including those in Chicago, Seattle and Las Vegas, as well as most of its outlets, it added.

Barneys for weeks has been searching for a buyer or investor, grappling with a crisis due to a steep hike in rent at its Manhattan flagship store on Madison Avenue to roughly $30 million from $16 million.

That is on top of pressure from online retailers that have emerged with the rise of Amazon.com Inc (O:) and pushed an abundance of traditional brick-and-mortar retailers to the financial brink, or caused them to fail altogether.

However, its Madison Avenue store will stay open, and its nine-floor footprint will also remain the same, the NYT said.

“While difficult decisions had to be made, this process will allow us to reset our financial position and maintain our longstanding vendor relationships,” the newspaper quoted Daniella Vitale, the store’s chief executive officer, as saying.

Barneys did not immediately respond to a Reuters request for comment.

Reuters reported in July that Barneys was exploring options, including filing for a bankruptcy with the assistance of law firm Kirkland & Ellis LLP.

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2019-08-05