Barneys New York has reached a preliminary agreement to sell its assets to brand development firm Authentic Brands Group and investment bank B. Riley Financial for approximately $271.4 million in cash, according to a U.S. bankruptcy court filing.
The deal is a “stalking horse purchase agreement,” which is used as a starting bid or a minimal accepted offer, which other interested bidders must surpass if they want to buy the company. Any further bids must be received before a deadline of Oct. 22, the filing said.
Reuters initially reported that Barneys was nearing a deal with Authentic Brands that could lead to Barneys shops opening in Saks Fifth Avenue stores, but it remains unknown how many Barneys New York stores Authentic Brands intends to keep open. As part of the deal, Authentic Brands reportedly would license the Barneys brand to Saks owner Hudson’s Bay Co. (HBC) and would also allow HBC to operate the Barneys web site. B. Riley’s role was not mentioned in the initial report, and there is still no official confirmation as to whether Authentic Brands will license the Barneys brand to HBC/Saks.
Competitors can still place bids for Barneys — one group led by fashion executive Sam Ben-Avraham, Founder of New York-based brands Kith and Atrium, had entered a $220 million bid for Barneys, and this group was continuing to work on a potential deal that envisions keeping many of the retailer’s current stores open.
Barneys filed for Chapter 11 bankruptcy in August and secured financing of $218 million from B. Riley and Brigade Capital Management to pay its vendors and employees. The retailer had until Oct. 24 to find a buyer or potentially face liquidation. In bankruptcy, the retailer has scaled down from more than 10 of its namesake stores to five.
Under the ownership of Authentic Brands Group,Barneys will join a retail portfolio that includes Premier Brands Group Holdings (formerly Nine West Holdings), Bandolino and Camuto Group, all acquired by the firm within the past two years. Authentic Brands was also part of a consortium that saved Aéropostale from liquidation in 2016.
The sale to Authentic Brands aligns with commentary provided by Barneys EVP and Chief Digital and Technology Officer Katherine Bahamonde Monasebian at ETail Boston in August, who indicated that the luxury retailer was actively seeking a “digitally focused” acquirer to guide its future.