BARNEYS BACKING: Barneys New York’s massive Chicago store opening last Thursday wasn’t the only market-moving event for the luxe retailer. After being relegated to “CCC” status by Standard & Poor’s on Monday, Barneys’ owner, Istithmar World Capital, came to the company’s rescue the following day, injecting a substantial sum — reportedly more than $25 million—into the business. The cash infusion will enable Barneys to pay off its vendors for the remainder of 2009, clearing up uncertainty created last month when the factoring firm Hilldun Corp. advised vendors and designers to hold shipments to the retailer. Dubai-based Istithmar said in a statement it believes the additional capital “allows [Barneys] financial flexibility to work with [its] major vendors and financial intermediaries. We will continue to monitor the company’s performance, but we are confident that no further injection is needed at this time.” The additional backing came after an S&P downgrade that indicated the retailer could be vulnerable for default, but David Jackson, CEO of Istithmar, denied the moves were related. Istithmar acquired Barneys in 2007 for more than $900 million, but sales for the year ended Aug. 2, 2008, totaled just $780 million.
— JESSICA PALLAY
EASE-Y ACQUISITION: Retailers were upbeat last week about H.H. Brown’s purchase of Kork-Ease, a fashion comfort brand known for its handmade cork wedges. “Kork-Ease is a successful brand, and H.H. Brown has a great background,” said Larry Bienenfeld, SVP of Jildor Shoes in Great Neck, N.Y. Marc Hausman, VP of Footnotes, based in Millburn, N.J., agreed, adding that the acquisition could provide more opportunity for the brand, which has been a strong seller at his stores. “Kork-Ease appeals to a really wide age group,” said Hausman. “It could be great as long as they don’t get away from what they’re known for.” Simply Soles owner Kassie Rempel was also optimistic about the deal’s impact on her Washington, D.C., business. “We have a lot of loyal Kork-Ease customers, and the brand already has great notoriety, so our customers will be excited to see some new lasts and new styles,” she said. Tom McClaskie, president of H.H. Brown’s Born Shoe division, said in a statement last week that under his design leadership, the brand would stay true to its roots while also expanding beyond sandals into a multi-season collection. H.H. Brown announced last week that it acquired the Houston-based brand from founder Mickey Rosmarin and is relocating the business to Greenwich, Conn. The new collection will bow at the June FFANY show in New York.
— LINDSAY E. SAMMON
BANKRUPTCY FOR GENERAL GROWTH: Ending its months-long struggle to stave off insolvency, mall giant General Growth Properties Inc. filed for Chapter 11 bankruptcy protection last Thursday, but said it would be business as usual at its portfolio of more than 200 malls. Approximately 158 regional shopping centers owned by the Chicago-based firm have also filed for bankruptcy, while some General Growth subsidiaries, including joint ventures and a third-party management business, did not apply for protection from creditors. The company, whose portfolio includes around 200 million square feet of retail space, filed for Chapter 11 protection in Manhattan Bankruptcy Court. General Growth amassed billions in debt to expand, but was unable to keep up with payments as the economy and credit markets soured. It received a commitment for $375 million in debtor-in-possession financing from investor William Ackman’s Pershing Square Capital Management. As of Jan. 9, Ackman controlled 22.9 million shares of the firm, or 7 percent of those outstanding. General Growth said it intends to pursue a plan of reorganization that extends mortgage maturities and reduces overall debt. “Our core business remains sound and is performing well with stable cash flows,” said Adam Metz, CEO.
— EVAN CLARK