Barneys New York Inc. will deepen its discounts over Black Friday weekend in a rare clearance of luxury brands -- undercutting rival retailers that are generally loath to offer price cuts on expensive merchandise.
Clearance sales at Barneys are 30% to 35% off as the Christmas shopping rush begins, a representative for B. Riley Financial, the firm handling the sale of all remaining inventory, confirmed Tuesday. That's steeper than an earlier round of 5% to 10% discounts, and it could have an effect on rivals' luxury sales for Black Friday.
Storewide discounts of this magnitude are scarce at high-end retailers, which avoid heavy discounting in order to maintain an exclusive aura around their luxury goods. Promotions are normally limited to leftover merchandise from previous seasons that didn't sell, but since Barneys is liquidating everything, the sales cover 95% of the store's goods -- including seldom-discounted brands such as Prada and Bottega Veneta.
Barneys' move to liquidate an entire chain worth of luxury goods is unprecedented, said Beth Goldstein, an analyst for fashion and handbags at the research firm NPD Group. As Barneys keeps slashing prices during the Christmas season, the lower prices may affect its competitors as well, especially at stores close to the remaining five Barneys locations in New York, California and Massachusetts. Discounts are expected to intensify through the Christmas season as products sell out.
"It's completely different from what we've seen from anyone in the past," said Goldstein. "We don't see discounts like this on luxury goods."
Barneys has been selling its remaining inventory after Authentic Brands Group LLC won court approval to buy the bankrupt company in late October. Authentic Brands plans to license the Barneys name and close stores as it rolls out shops inside Saks Fifth Avenue locations. A representative for Authentic Brands declined to comment.
Returns are no longer accepted by Barneys, and shoppers can't redeem gift cards as the retailer looks to jettison remaining merchandise. There are more than 26,000 different luxury items still available on the Barneys online store.
Meanwhile, several Barneys locations have been promoting their store-closing sales with people on the street holding up red-and-yellow signs reading, "Everything must be sold."
Business on 11/28/2019