A spokesperson for the retailer told FN, “Barneys is continuing to work towards a value-maximizing going-concern transaction, including in relation to a potential transaction led by Sam Ben-Avraham and his group of financial, operational and strategic partners, up to and including the Oct. 31 sale hearing.”
Updated (Oct. 24, 4:30 p.m. ET)
Barneys New York has moved forward with the sale of its intellectual property to Authentic Brands Group, which has announced the details of its deal to snap up the luxury retailer from bankruptcy.
The brand management company will grow Barneys’ presence through high-fashion collaborations and namesake products as well as dining and shopping experiences. It intends to expand the brand in key international markets, particularly in Asia, as it builds off of the success of the chain’s current business in Japan.
Additionally, as part of a licensing agreement, Saks Fifth Avenue will become the retail partner for the Barneys brand in the United States and Canada.
“We are thrilled that our offer for Barneys has been accepted,” ABG founder, chairman and CEO Jamie Salter said in a statement. “Barneys is one of the most recognizable and iconic names in luxury lifestyle, and we see an incredible opportunity to extend the brand’s equity in current and new markets around the world. We are also excited to join forces with Saks Fifth Avenue, the preeminent luxury retailer that continues to bring innovation and fashion authority to the industry.”
Marc Metrick, president of Saks Fifth Avenue, added, “Barneys’ iconic name brand has long captured the attention of fashion-seeking audiences. As we explore opportunities for the brand as part of Saks Fifth Avenue, we are working to best understand what Barneys’ customers love about the retailer as we evolve it into a new interpretation that is relevant for today’s luxury consumer.”
On top of assuming the brand marketing, business development and brand management functions for Barneys, ABG is also set to gain its associated intellectual property, including FiveSeventyFive, Connor New York, Fred and The Drop.
The transaction is expected to close by Nov. 1, but some reports have suggested that there is still room for another bid, led by Sam Ben-Avraham, to re-emerge in the process.
What We Reported (Oct. 24, 3:22 p.m. ET)
Authentic Brands Group has confirmed it is now the owner of storied luxury retailer Barneys New York.
The brand management company has emerged as the winner in the battle for the luxury department store chain, following weeks of speculation about potential suitors that could help pull the business out of bankruptcy.
In an email to FN, ABG said it had been informed that the auction on Oct. 28 has been canceled, after the debtors filed a notice with the court confirming that no other qualified bids had been submitted. The sale of Barneys’ intellectual property is expected to be completed on Oct. 31.
“We look forward to proceeding with our plans for Barneys as we continue the closing process,” an ABG spokesperson for the company told FN.
ABG with B. Riley Financial Inc. had been designated the stalking-horse bidder last week. A filing on Oct. 16 in the U.S. Bankruptcy Court in the Southern District of New York read that Barneys had entered into an agreement to sell its assets in a cash deal estimated at roughly $271.4 million.
Leading up to the purchase, Barneys had been “actively pursuing” additional options with “multiple bidders.” Among them was fashion trade executive and Kith investor Sam Ben-Avraham, who over the weekend launched a campaign to raise capital to complete his bid for the retailer. Footwear designer Steve Madden and former Istithmar CEO David Jackson had also reportedly been putting together separate eleventh-hour bids for Barneys.
The retailer was originally scheduled to receive bids on Oct. 22 from potential buyers, followed by an auction today. But an application to extend the bid filing deadline had pushed the auction, now canceled, to Oct. 28.
As part of ABG’s proposed plan, all of Barneys’ seven stores would be slated for closing, including its storied Madison Avenue flagship, which spans 265,000 square feet and 10 floors. The chain also has two other locations in New York, as well as three in California and one in Boston. The 12 stores it licenses in Japan under a franchise agreement will remain open.
As with the roughly 50 other businesses under its large and growing umbrella, ABG has said it intends to run Barneys’ digital operations but will license the Barneys name to Saks Fifth Avenue, which is expected to create private-label merchandise and build shop-in-shops within some of its locations.
The company said in its statement today, “Barneys is one of the most recognizable and iconic names in luxury lifestyle. Our goal is to preserve and build upon Barneys’ legacy and evolve it for the future. We are also looking forward to our licensing partnership with Saks Fifth Avenue, the preeminent luxury retailer that continues to bring innovation and fashion authority to the industry.”
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