It was once one of the world's most exclusive retail outlets. Located on Manhattan's luxury shopping strip of Madison Ave, Barneys New York was the preserve of high rollers who had wads of cash to spend on only the fanciest brands.

When asked on seminal 1990s sitcom Sex and the City which New York neighbourhood she voted in, actor Sarah Jessica Parker's character Carrie Bradshaw replied: "Whichever one is near Barneys."

The New York elite would walk in with space on their credit cards and walk out with the store's distinctive black bags stuffed full with the likes of Balenciaga, Yves Saint Laurent, Valentino and Prada.

Madonna once spruiked her wares at Barneys, and a whole floor was given over to products created by Lady Gaga.

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Barneys, New York is located on Madison Ave. Photo/ 123RF
Barneys, New York is located on Madison Ave. Photo/ 123RF

Yet today the department store's flagship Manhattan branch is a scrum. Vivid red and yellow signs scream "everything must go", designer shoes lie haphazardly in trays waiting to be bought for a bargain, even the fittings are up for sale.

One commentator said it looked "more like Kmart than Madison Ave".

There are reports of "rampant theft" as thousands of dollars of luxury brands are swiped and some thieves allegedly "scratching and biting" staff who try to apprehend them.

Last year, as the ill winds of retail doom began to rage ever more fiercely around Barneys, Parker lamented its downfall: "It's stunning. It's really shocking.

"To me, Barneys was the gold standard," she told Bloomberg about when she first discovered the store.

"It wasn't a store that I could afford, but I didn't mind it. It was like a beacon."

That beacon's last store will very possibly vanish in the next few weeks, just three years shy of its 100th birthday.

In 1923, Barney Pressman pawned his wife's wedding ring to buy the lease on a clothing store on New York's Seventh Ave. It prospered as a discount store selling big brands at a bargain.

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As the decades went on, Barneys inched more up-market and expanded to womenswear. In the early 1990s it closed its original store and opened an eight-floor flagship on ritzy Madison Ave, the fit-out dripping in marble and gold leaf. Its reputation was cemented.

"Barneys was one of the first department stores to really act like a specialty boutique, to make it a sort of place you came to feel like you were part of the cool crowd," Vanessa Friedman, chief fashion critic for The New York Times, told the US National Public Radio in October after the store's bankruptcy was announced.

"It was like the ultimate symbol of a certain kind of New York style at the time, which was sort of cutting-edge, sort of elitist, sort of inaccessible but also deeply glamorous and very aspirational to everyone else."

The store's success with rich-listers saw it expand to Beverly Hills, Chicago and beyond as well as set up a subsidiary in Japan.

However, even in Barneys' 1990s heyday, black clouds formed and – for a time – were batted away. In 1996, Barneys went bankrupt, and the Pressman family lost control of the business, yet it bounced back under new owners.

Since then, the business has been through a slew of different owners.

But the issues were piling up higher than last season's Louboutins. Some customers were heading online, others to the stand-alones stores that luxury brands were increasingly investing in rather than being reliant on traditional department stores.

Then there were problems only Barneys had to bear, like a reported 72 per cent hike in the rent on its Madison Ave flagship.

Closing down 'too tacky to stomach'

Last August, it filed for bankruptcy once more and was bought for $271 million ($A392 million) by firm Authentic Brands Group. The name would stay, the new owners said, but most of the stores would go.

Instead, Barneys would now reappear as a department within the branches of Saks Fifth Ave, which up until now had been an arch rival.

Flagship New York stores remain open – for now – but there's less and less to sell.

In December, New York Post reporter Lisa Fickenscher said Barneys' closing down sale was "too tacky to stomach".

"The bankrupt luxury mecca's flagship has been plastered with garish orange-and-yellow signs hawking discounts of 50 per cent and more – a scene that, except for the sky-high prices, looks more like Sears or Kmart than Barneys New York.

"'Everything 30% to 50% off' blared a sign – just centimetres away from the chic Prada logo stencilled on the wall."

'Rampant theft'

Earlier this month, staff at the embattled chain complained they hadn't been paid because of an unspecified "cyber incident".

The same employees are also facing a surge in theft as light-fingered shoppers aim for a 100 per cent discount.

One staff member told website Business Insider the store had become a "free for all", and people were regularly walking out without paying.

"We have a lot of theft, so much so that we've had to lock up every single bag on my floor. We were robbed twice in one week once, and in the summer, we had droves of kids just coming trying to steal from us," they said.

The website characterised Barneys as being in the grip of a wave of "rampant theft".

In one memorable incident in November, two women reportedly "scratched and bit" staff who attempted to prevent the theft of a Moncler hat that had been reduced to $392, reported the New York Daily News.

Valued security guards have left for other jobs, while an incentive scheme that meant staff were paid a bonus for preventing theft has been scrapped. As such, there's little to be gained by engaging potentially violent shoplifters.

Barneys' website now points to Saks Fifth Ave and question marks surround when the remaining New York stores will close given there will soon be precious left to sell.

Barneys' demise a worry for other retailers

The company's demise will come as a worry to high-end department stores around the world who have bet that the luxury end of the market is where money can still be made.

Overall, the luxury goods market has grown by 4 per cent, according to analysts Bain & Company. Australia's own David Jones has remodelled its flagship Sydney store to put luxury names front and centre. A giant Louis Vuitton store within a store takes up an entire facade of the ground floor.

Some of Barneys' problems were all its own – its massive rent bill and a general air of snootiness. But the trend away from department stores has been universal and is something iconic retailers from DJs to London's Selfridges and Paris' Galeries Lafayette are looking to arrest.

The New York Post spoke to one shopper at the store who was disappointed with her final visit to the once iconic Barneys.

"It's very sad that it's closing," she said. "The sale is a mix of incredible finds and sub-par stuff that looks like they just dumped into the store to fill it up."