A rent hike at Barneys New York’s flagship store already seems to be impacting the luxury retailer.
In January, the rent at 660 Madison Avenue officially jumped to about $30 million in January from $16 million and the retailer, which has about $850 million in sales, extended the term of its credit line by $50 million, CNBC reported. The deal extends the retailer’s credit agreement with Wells Fargo and loops in TPG Sixth Street Partners as a lender.
Sources also told CNBC that the spike wiped out the retailer’s EBITDA — or earnings before interest, tax, depreciation and amortization, though Barneys said the outlet its EBITDA remains positive.
The markup wasn’t a surprise; Barneys and landlord Ashkenazy Acquisition’s battle over the rent increase has been raging since 2016. The move became final after a city arbitrator last year set the $30 million figure, nearly doubling the retailer’s rent.
Last month, Barneys was reportedly planning to reduce its footprint at 660 Madison Avenue by half, but company officials refuted the report. [CNBC] — Mary Diduch