Barneys could launch stores inside Saks Authentic Brands deal

If the corporate attempting to purchase Barneys New York will get its approach, there could be many extra Barneys popping up inside Saks stores within the close to future.

Authentic Brands Group, the licensing firm that owns manufacturers like Aeropostale and Juicy Couture, has put in a $271 million bid with B. Riley Financial to purchase Barneys out of chapter, based on a courtroom submitting. The bid serves as a so-called stalking horse supply guaranteeing it would purchase the retailer − until one other bidder places ahead a better supply. Others, together with a bunch of retail executives, are stated to be vying for the corporate, individuals aware of the talks advised CNBC. If extra bids are lodged, Barneys will maintain an public sale on Oct. 24.

As a part of the Authentic Brands deal, it would put Barneys stores inside Saks, the luxurious retailer owned by Hudson’s Bay Company, an individual familar with its plans stated. Saks has 39 stores throughout 22 states.

Barneys, the stylish, upscale retailer filed for chapter earlier this yr, because it struggled with waning gross sales and outsized lease.

The luxurious division retailer known as the bid “a positive step forward” for Barneys, and a “strong” recognition of the worth of its property and model title.

“We are encouraged by the stalking horse bid by Authentic Brands Group in partnership with Saks Fifth Avenue,” a Barneys spokesperson stated in a press release. “Additionally, we appreciate the ongoing interest by Sam Ben-Avraham and are actively pursuing additional options with those who have expressed their intent to submit bids during the upcoming auction process.”

Ben-Avraham is the co-founder of the streetwear model Kith and owns a bunch of commerce exhibits. He has joined with different buyers to make a rival bid. 

In chapter, the retailer has whittled down its measurement from greater than 10 of its namesake stores to 5. While consultants have stated Barneys’ model within the luxurious house stays robust, the way forward for its remaining stores has been in query.

Barneys did essentially the most gross sales in its Madison Avenue retailer in New York, adopted by on-line and its retailer in Beverly Hills, California. But each its Madison Avenue and Beverly Hills stores are in buildings owned by actual property funding firm Ashkenazy Acquisition. The actual property funding agency doubled Barneys’ lease final yr, a transfer the retailer contested and stated helped result in its chapter.

If Authentic Brands closes its deal for Barneys, it could nonetheless attempt to renegotiate the leases for some its greatest properties, together with staying in Madison Avenue, however downsizing its presence, an individual aware of the scenario stated. Barneys has been on Madison Avenue for years and its inside infrastructure is advanced, which can make it harder for Ashkenazy to discover a alternative, this particular person stated.

Regardless of whether or not its present stores keep, Authentic Brands plans to place a variety of Barneys stores inside Saks, the particular person stated. While each are luxurious stores, Barneys is taken into account the hipper cousin to Saks. Putting Barneys inside Saks would due to this fact echo a transfer it and a variety of different division stores, together with Macy’s, have taken so as to add selection to their buying experiences, in hopes of holding it contemporary and buyers visiting extra incessantly.

Saks experiments with its stores in recent times embrace creating “wellness” facilities. The model is likely one of the brighter spots inside father or mother Hudson’s Bay Company’s portfolio. Shares of HBC had fallen practically 50% from the beginning of 2019 by June 10, when a consortium led by its govt chairman launched a suggestion to take it non-public.

That deal remains to be being pursued, however has confronted pushback from buyers, together with non-public fairness agency Catalyst Capital Group, which has known as the supply too low.

It beneath overview by the particular unbiased committee appointed to evaluate the supply.

Meantime, the corporate has been streamlining its enterprise to deal with its debt and sagging gross sales. In September, HBC introduced plans to promote Lord & Taylor to clothes rental subscription service Le Tote for $100 million.

Officials from HBC, Authentic Brands and Barneys weren’t instantly obtainable to remark. B. Riley declined to remark.

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