US luxury department store Barneys New York has filed for Chapter 11 bankruptcy and put itself on sale. 

The retailer is closing stores in Chicago, Las Vegas and Seattle, along with five smaller concept stores and seven Barneys Warehouse locations.

Its CEO, Daniella Vitale, blamed higher rent costs for its troubles and said the bankruptcy filing allowed it time to reorganise its debts or sell parts of the business.

"Like many in our industry, Barneys New York's financial position has been dramatically impacted by the challenging retail environment and rent structures that are excessively high relative to market demand," said Vitale in a statement sent to just-style.

"In response to these obstacles, the Barneys New York board and management team have taken decisive action by entering into a court-supervised process, which will provide the company with the necessary tools to conduct a sale process, review our current leases and optimise our operations."

Its five flagship stores — Madison Avenue, Downtown NYC, Beverly Hills, San Francisco and Copely Place in Boston — will remain running as well as its websites.

Barneys also confirmed it has secured $75m in new capital from affiliates of Hilco Global and the Gordon Brothers Group, which, combined with operating cash flow, will help Barneys New York to meet its go-forward financial commitments. 

Ben Nortman, executive vice president of Hilco Global said: "We are pleased to partner with Barneys New York as it takes this proactive step to conduct a value-maximizing sale process. We are investing in Barneys because we believe that it is an iconic retail brand. We look forward to working with the team to achieve the best outcome for all stakeholders."

Commenting on the move, Neil Saunders, analyst at GlobalData said: "The bankruptcy of Barney's is the inevitable result of a toxic cocktail of pressures on the business. It has suffered from weak footfall as shoppers have increasingly defected to buying direct from luxury brands or from a new wave of online luxury sellers such as Net-A-Porter. In the physical world, new rivals have opened up – especially in New York where, for example, Neiman Marcus now has a store. Alongside this, Barneys has failed to develop its proposition which seems tired and has lost some of the edge that once made it special.

"The problem for Barneys is that as demand has softened its costs have risen. Rental costs are up, and these are especially punishing for a department store which needs a lot of real estate. Moreover, staffing and logistics costs have also risen, which take their toll on the bottom line.

"Bankruptcy gives Barneys some breathing space, and it allows it to shutter some of the regional stores. The closure process is important as the operation outside of the major metropolises has never worked that well as it's out of kilter with what people in regional markets want and the locations are often not dense or populous enough to support a store like Barneys.

"That said, bankruptcy is not the solution. Barneys will still have many of the same problems, especially in terms of property costs, so the trick is to focus on growing the top line. That means investing more in online and creating a higher profile web operation. It also means making stores more compelling through events, own-label products, more exclusives with brands and so forth. In short, Barneys needs to get people shopping with it again, and in today's highly competitive retail environment that's a tall order."