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ABG Is Barneys' New Owner
Authentic Brands Group wrapped up the deal to acquire influential, but troubled, retailer Barneys New York Inc. on Nov. 1, according to media reports. To note the win, the company posted a meme that said, “Barneys New York Forever” on its Instagram profile @abg_nyc.
Barneys closing sales were announced Nov. 1. They'll take place at the retailers’ five flagships, including its Madison Avenue store, and Barneys Warehouse locations, according to a statement from Great American Group, which is a B.Riley Financial company, and Tiger Capital Group. However, it was reported by The Wall Street Journal that Barneys’ Madison Avenue flagship will stay open for another 12 months.
ABG’s road to Barney’s ownership was dramatic and filled with twists and turns. In an Oct. 31 hearing at the United States Bankruptcy Court for the Southern District of New York, Judge Cecilia G. Morris approved ABG’s $271.4 million bid to take over Barneys, which filed for Chapter 11 bankruptcy in August.
The ruling left a small window open for another bidder to submit a higher bid, which gave ABG’s rivals additional time assemble a more lucrative offer.
On Oct. 24, ABG claimed that it had wrapped up the deal to acquire Barneys. The announcement was upended when a competitor, Sam Ben-Avraham, submitted a rival bid. He also mounted a “Save Barneys” social-media campaign that gained more than 19,000 signatures supporting his group’s bid.
On Nov. 1, Ben-Avraham notified campaign followers that he had withdrawn his bid. He called it the hardest decision of his life. "Unfortunately, we failed to convince enough people in the business community that it made economic sense to keep Barneys alive. Some unexpected roadblocks 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," he wrote. "I apologize if I have failed anyone, and gave anyone false hope by not being able to close the deal."
Former Barneys owner David Jackson also put together a bid for the company.
Saks Fifth Avenue is scheduled to become a retail partner for Barneys in the U.S. and Canada. The ABG statement said that it will selectively license the Barneys name around the world. It also will maintain Barneys’ current licensing agreement with Seven & i Holdings which operates 12 Barneys stores in Japan. While this agreement will allow the luxury destination to remain in business,some in the industry fear the transition is going to end Barneys reputation as an enclave for a discerning consumer.
“We will mourn the loss of Barneys as one of the last places one could investigate new brands, new lines and new ideas at the couture level,” said Ilse Metchek, president of the California Fashion Association.
