Barneys Nears Bankruptcy Deal With Authentic Brands, Saks Owner
U.S. luxury department store chain Barneys New York is nearing a roughly $270 million deal with brand developer Authentic Brands Group that could lead to Barneys shops opening in Saks Fifth Avenue stores, people familiar with the matter said on Monday. Without an offer from Authentic Brands, Barneys faced winding down its business entirely. It filed for bankruptcy protection in August, citing rent hikes as a factor in its decision. As part of the proposed Authentic Brands deal, it will license the Barneys name to Hudson’s Bay Company (HBC), the owner of luxury department store chain Saks Fifth Avenue. The agreement would also allow HBC to operate the Barneys website, one of the sources said.
Total Retail's Take: This news represents a possible future for Barneys New York, something that was far from guaranteed when the iconic department store chain filed for bankruptcy this past August. The proposed deal with Authentic Brands Group sets the bidding for a bankruptcy auction of Barneys later this month. As for the future of the company's brick-and-mortar stores, that depends on the winning bidder. Authentic Brands Group is expected to keep some of Barneys’ stores open if it's the winning bidder, while fashion executive Sam Ben-Avraham has explored a bid for Barneys and is continuing to work an a potential deal that envisions keeping many of the retailer’s current stores open. Consolidation in the luxury department store sector, including a potential pairing between Barneys and Saks Fifth Avenue, is a real possibility as traditional brick-and-mortar retailers look to strengthen themselves in the face of increased competition online.