Barneys New York is facing a big rent markup at its flagship store at 660 Madison Avenue — to the tune of an extra $40 million by 2019 — tossing the future of the luxury retailer’s location up in the air.
The store — along with Barneys on Wilshire Boulevard in Beverly Hills — could see rents triple in three years when the lease renewal options comes due, making it difficult for majority owner Richard Perry to sell a stake in the company as he’s been trying to do, the New York Post reported.
Together, the two locations account for about $400 million, or roughly two-thirds, of the company’s revenue. The Madison Avenue store’s rent could skyrocket to $60 million from $20 million, based on $1,500-per-square-foot rents in the neighborhood, sources said. The Beverly Hills store’s rent could jump to $14.5 million from $5 million, the Post reported.
“This is a ticking time bomb for Barneys” and could scare off investors, a former executive said.
Barneys signed a 71,000-square-foot lease renewal and expansion at its corporate headquarters at 575 Fifth Avenue last December, as TRD reported. The length of the lease was not disclosed. Last year, Barneys moved its visual department to a 10,000-square-foot manufacturing and office space in Long Island City. [NYP] — E.B. Solomont