Sam Ben-Avraham has ceded in the battle for Barneys New York, leaving Authentic Brands Group to seal the deal for the luxury retailer.
In an Instagram post shared a half hour ago, the fashion trade executive announced the withdrawal of his going-concern bid, which sought to keep open at least five flagship stores, two outlets and the distribution center, as well as save thousands of jobs and hundreds of vendor partnerships.
“After two months of working around the clock, my team and I had to make the hardest decision we could have imagined: to pull out of the race and not go to court this morning,” he wrote in a post on @SaveBarneys — a public campaign created to help Ben-Avraham raise capital to complete his bid for the department store chain.
“My team and I still feel very strongly about Barneys: what it stands for and what it could mean in the future. We believe it has its place in New York’s landscape and beyond,” he added. “Unfortunately, we failed to convince enough people in the business community that it made economic sense to keep Barneys alive… I apologize if I have failed anyone and gave anyone false hope by not being able to close the deal. I know this chapter is about be be over and not the way I wished or imagined. I hope something greater will come from it.”
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Dear Family, Last night after two months of working around the clock, my team and I had to make the hardest decision we could have imagined: to pull out of the race and not go to court this morning. This was one of the hardest decisions I have made in my life thus far. My team and I still feel very strongly about Barneys: what it stands for and what it could mean in the future. We believe it has its place in New York’s landscape and beyond. During the process we were fortunate to meet a lot of amazing people who joined our team and gave everything they had to save this New York institution. Unfortunately, we failed to convince enough people in the business community that it made economic sense to keep Barneys alive. Some unexpected road blocks were put in our way. We understood from the beginning that looking at spreadsheets and numbers, it did not make sense but we saw a future beyond that. We knew that once we overcame that hurdle there would be light at the end of the tunnel. I apologize if I have failed anyone, and gave anyone false hope by not being able to close the deal. I know this chapter is about be be over and not the way I wished or imagined. I hope something greater will come from It. I want to thank my team who gave the fight of their lives and haven’t slept for the past two months. To all the people who believed in the dream and kept us going beyond the imagination. To all Barney’s family members who we met personally and the ones we met virtually and made us feel part of the family in that very short period. I wish I could do more. The stores might be gone but the spirit will live forever. Cheers to the life of Barneys. – Sam
The withdrawal came a day after Barneys’ sale to stalking-horse bidder ABG and investment banking firm B. Riley Financial was approved by a judge in a hearing at the United States Bankruptcy Court for the Southern District of New York.
On Oct. 16, according to court documents, the retailer had entered into an agreement to sell its assets to ABG and B. Riley in a cash deal estimated at roughly $271.4 million.
As part of the court-approved transaction, the brand management company — which submitted a liquidation bid — intends to shutter all of Barneys’ seven existing stores, including the Manhattan flagship on 660 Madison Avenue, and license the name to Saks Fifth Avenue, which will create private-label merchandise and build shop-in-shops inside some of its locations.
ABG also plans to grow Barneys’ presence through high-fashion collaborations and namesake products, as well as expand it in key international markets, particularly in Asia, where it would be able to build on the success of the chain’s stores in Japan.
Other parties had previously conveyed interest in purchasing the company, including former Istithmar CEO David Jackson. (The Dubai-based investment firm had bought Barneys for $942.3 million from Jones Apparel Group in 2007 and relinquished ownership to Perry Capital in 2012.)
FN has reached out to ABG and Barneys for comment.
Barneys filed for Chapter 11 bankruptcy protection nearly three months ago, but it managed to secure $218 million in financing that allowed it to maintain operations. The retailer has struggled amid skyrocketing rents and shifting consumer demands that have weighed heavily on its margins, particularly in Manhattan, where the Madison Avenue flagship has stood for nearly a century.
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