All Barneys stores could close as part of a tentative $271 million deal
- Barneys New York reached a tentative $271 million agreement to sell its remaining assets to Authentic Brands Group and investment firm B. Riley Financial on Wednesday, according to court documents. The bankrupt company has until October 22 to strike a definite deal.
- As part of the deal, the remaining seven Barney's locations may be shuttered, though Authentic Brands Group intends to license the brand to Saks Fifth Avenue, a move that would preserve the luxury department store's name and prevent liquidation.
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Barneys New York may soon have a new owner.
On Wednesday, the bankrupt company reached a tentative $271 million agreement to sell its remaining assets to Authentic Brands Group and investment firm B. Riley Financial. According to court documents, the deal calls for the closure of Barneys' seven remaining locations, which includes its flagship location on Manhattan's Madison Avenue.Read more: Bankrupt Barneys says it has bidders interested in buying it, but lenders are still full of doom and gloom
"This development is a positive step forward for Barneys, and a strong recognition of the value of Barneys' assets and brand name," a company spokesperson said in a statement to Business Insider. "We are working hard to achieve a successful sale process that will preserve the integrity of this incredible brand and ultimately benefit our employees, customers, vendors, and other business partners."
The deal as it stands would prevent total liquidation of the store, through a restructuring process in which Authentic Brands Group would license the Barneys name to Saks Fifth Avenue, the Wall Street Journal reported. This would effectively allow Saks to feature Barneys in its own stores and sell its products.
However, while the company spokesperson said Barneys is "encouraged by the stalking horse bid by Authentic Brands Group in partnership with Saks Fifth Avenue" the deal is not definitive, as Barneys is still weighing offers from other bidders in advance of the October 22 court deadline. Among them is a group led by Kith cofounder and owner Sam Ben-Avraham, which the spokesperson said is among options Barneys is "actively pursuing."
If the Authentic Brands Group deal does go through, it's also possible that select stores may remain standing, depending on discussions with landlords, a source told the Journal.
Authentic Brands Group has been credited with breathing new life into dying brands in recent years, through savvy acquisitions and revitalization strategies. With the help of ABG's ownership, formerly beleaguered brands including Aeropostale and Juicy Couture have made comebacks.Both Barneys New York and Authentic Brands Group were not immediately available to respond to Business Insider's request to comment.