Barneys Workers Feel Used as They March Store Toward Death

Barneys added that it did not expect the firm liquidating the remaining seven stores, B. Riley Financial’s Great American Group, to hit sales targets of at least $303 million, which would have resulted in an infusion to the severance fund of at least $2 million. Great American is not in charge of administering employee severance, pensions or benefits, according to a company representative.

Before the liquidation started, Barneys employed about 2,300 people, 2,100 of them full time. The remaining seven stores, according to the company, are expected to close on or before Feb. 29, while the restaurant Freds will most likely close by Jan. 31.

Barneys’s employees — some with decades of experience — are the latest workers to be squeezed by the churn of retail bankruptcies, as businesses struggle to keep up with the shift to e-commerce and grapple with poor management and disastrous private-equity deals. Already this year, Opening Ceremony, the high-end fashion retailer, said it would close its handful of stores, and Pier 1, which has been bleeding cash, said it would shut up to 450 of its locations.

When bankruptcies result in major liquidations, as has happened at notable retailers like Payless ShoeSource and Toys ‘R’ Us, workers often end up participating in what is essentially the death march of their stores. The white-collar firms managing such exits need the employees for orderly transitions; many workers stay for promised payments, out of a sense of loyalty or because they are not yet sure of their next move.

Article source: https://www.nytimes.com/2020/01/16/business/barneys-new-york-employees-severance.html?emc=rss&partner=rss