Last month luxury department store chain Barneys New York got a much needed cash infusion but it may not be enough to save two of its seven stores. The Wall Street Journal says that the company, which is owned by Dubai's Istithmar World, is seeking to close the stores to save money but the real reason may be that one of the stores is proving to be a dud.
One of the stores is the 85,000-square-foot location at the Shoppes at the Palazzo in Las Vegas. Barneys is the anchor of that complex which opened last year in an area clustered with luxury retailers. Barney's had hoped to generate $6 million at that location but with the huge downturn in Las Vegas travel the store has been only brought in around a quarter of that.
Should Barney's close that store it would leave a huge hole in the shopping area that would not be easily filled and so the store may have some trouble getting out of its lease. Also the Shoppes at Palazzo is owned by General Growth Properties which recently filed for Chapter 11 bankruptcy. Overall, business at the Shoppes seems to be pretty slow. It is a newcomer in a packed area that has several key shopping locations including the Forum Shops at Caesar's Palace. Barneys New York's competitors, Neiman Marcus, Bloomingdales and Nordstrom are located at the Fashion Show Mall on the Strip.
The location of the other store to be closed hasn't been determined yet. Barneys cancelled plans for a restaurant in its Dallas store earlier this year.