Could ABG Throw Its Hat in the Ring for Bankrupt Barneys?
As Barneys New York wades through bankruptcy, five potential buyers are reportedly courting the luxury retailer — one of which could likely be Authentic Brands Group.
According to Bloomberg, which cited people familiar with the matter, the beleaguered department store chain has received letters of interest in all or part of its business as it continues to sell assets and stave off possible liquidation.
The report revealed that two unnamed petitioners are seeking all of Barneys’ assets, and at least one likely suitor is an investment firm with previous holdings in the retail sector. It also noted that other parties are expected to participate in the retailer’s bankruptcy auction but opted against submitting letters that could be available to the public before that time.
In an interview last week with FN, ABG — which has been rumored to be among the potential buyers — confirmed its interest in buying Barneys out of bankruptcy.
“There is truth behind that; we are backing the new lenders,” said ABG founder, chairman and CEO Jamie Salter. “They have a backup bid from us for the intellectual property, but we’ve got to wait until Oct. 24 and see who comes and who doesn’t come. Based on that, we’ll decide how far we play.”
In an agreement with bankruptcy lenders, Barneys had until Sept. 25 to pocket letters of interest from bidders, with the deadline to submit formal offers scheduled for Oct. 24 and the bankruptcy auction dated no later than Oct. 29.
“If nobody shows up, we will be the owners of Barneys,” Salter added, “and our play for Barneys is to really build it as a luxury brand from what it is today. It will have e-commerce and retail no different than how it [already] does, but it may be in a different format, and we’ll see whether the landlords want to play or not and how favorable they’ll be.”
ABG, which was named FN’s Company of the Year in 2018, already counts more than 50 brands across the fashion, lifestyle, sports, entertainment and media sectors — including Vince Camuto, Nine West, Frye and Aeropostale — and has been aggressive in the acquisition game.
The group picked up the Nautica brand from VF Corp. last March, purchased Nine West and Bandolino out of bankruptcy in June and secured the Camuto Group in October. It also recently completed a $110 million purchase of the Sports Illustrated intellectual property from Meredith Corp., noting an opportunity to position the brand as a leader in e-sports and sports gambling.
“Everyone knows that if you want to play with ABG, we play to win, and ‘win’ means everyone wins — not just one party. That’s very important for us,” Salter said. “The suppliers need to win, and the landlords need to win, and the brand needs to win.”
FN has reached out to Barneys for comment.
A day after filing for Chapter 11 bankruptcy protection on Aug. 6, Barneys secured new financing from Brigade Capital Management LP and B. Riley Financial Inc. worth $218 million to allow it to continue operating.
A Manhattan institution for nearly a century, Barneys has struggled in the face of skyrocketing rents and changing consumer demands that have long weighed heavily on its margins. The company was burdened with an annual rent bill that reportedly rose dramatically early this year to upwards of $44 million and was particularly hefty at its flagship store on 660 Madison Ave., which faces significant property taxes.
Over the past month or so, the chain shuttered units in Las Vegas, Chicago and Seattle, and it closed some warehouse locations and smaller concept stores as part of its restructuring plan. The company received court approval to continue paying employee wages and honoring customer orders as it works toward meeting its financial commitments going forward.
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