- Authentic Brands Group (ABG) has teamed with financial firm B. Riley to buy Barneys' assets for approximately $271.4 million in cash, according to a filing with the United States Bankruptcy Court in the Southern District of New York.
- The so-called stalking horse bid precludes the scheduled auction later this month unless a higher bid comes in. Bids are due Oct. 22, and if any qualify, an auction will be held Oct. 24. A group led by entrepreneur Sam Ben-Avraham is reportedly interested, but has encountered difficulty assembling the needed financing, according to news reports.
- The proposal entails the closure of seven Barneys stores: two in New York City, one in Central Valley, New York, three in California (Beverly Hills, San Francisco and Livermore), and one in Boston, the documents show. The stores closing include all five full-price Barneys stores and two listed as outlets. Another 15 stores in eight states are not part of the deal, according to the filing.
If Authentic Brands Group's ultimate plans are to tie the Barneys brand to Saks Fifth Avenue, as the Wall Street Journal continues to report, the beleaguered department store's brand would live on in its New York City hometown, and elsewhere Saks operates.
Barneys and ABG did not immediately return Retail Dive's request for comment about the deal on the table. B. Riley said in a statement emailed to Retail Dive: "B. Riley Financial and our affiliates are pleased to work with ABG in support of preserving the value of Barneys New York and its iconic brand."
Saks owner HBC also did not respond to Retail Dive's request for clarification about its involvement. But, while a relationship with Saks would ensure the Barneys name survives, it might not preserve what made Barneys unique. The retailer for years has offered luxury shoppers an edgy, creative assortment that Thomai Serdari, professor of luxury marketing and branding at New York University's Stern School of Business, deems "avant guard," and that Shawn Grain Carter, professor of fashion business management at the Fashion Institute of Technology, sees as once the epitome of "downtown cool."
Such a tie-up should benefit Saks, as it might bring in the young shoppers who still frequent Barneys, an unusual boast for a department store these days. "I think it's reasonable to believe that the Barneys brand has enough cache that it could bring a younger, millennial shopper into Saks, at least that appears to be the thinking," Sanford Stein, retail analyst and author of "Retail Schmetail," told Retail Dive earlier this week. "It sounds like they are planning on creating Barneys shops within Saks, and if it's executed well could indeed become a feature Saks needs."
The privately-owned retailer has struggled for months amid steeply climbing rents, especially at its Madison Avenue location in New York, and weeks ago said it might not make it through the summer. Barneys filed for Chapter 11 protection in August and secured emergency financing shortly after.