NEW YORK (AP) — Barneys New York, the iconic luxury chain, says a bankruptcy judge has approved the sale of its assets to fashion licensing company Authentic Brands Group.
The New York-based retailer said Thursday there's still a chance that rival bidders could come forward before the sale closes on Friday.
Under the deal with Authentic Brands, Barneys New York will likely close most of its seven stores. Authentic Brands plans to license the Barneys name to Saks Fifth Avenue.
"Over the past several months, we have worked diligently with the court, our lenders and creditors to maximize the value of Barneys in this sale process, and we continue to work with all relevant parties towards the best solution for Barneys' employees, designers and vendors, and customers," Barneys said in a statement emailed to The Associated Press.
Authentic Brands, a licensing company that owns such brands as Nine West and Aeropostale, confirmed the purchase.
Barneys New York filed for Chapter 11 bankruptcy protection in August, the latest retailer to buckle as shoppers move online.
The chain also was struggling with escalating annual rents, particularly at its crown jewel store on Manhattan's Madison Avenue. Barney's Manhattan landlord doubled the rent to nearly $30 million this year.
Barneys, controlled by New York hedge fund Perry Capital, listed more than $100 million in debt and more than $100 million in assets in its bankruptcy filing in the Southern District of New York.
The sale comes as luxury retailers are reinventing themselves to respond to their customers who aren't focusing on filling up their wardrobes with expensive items. They're embracing rental services and buying secondhand status goods at places like The RealReal.com. They are also shifting their spending to travel and other experiences.
Given these changes, luxury sales have underperformed overall retail sales, according to MasterCard SpendingPulse, which tracks spending across all sorts of payments including cash and checks. U.S. luxury sales, excluding jewelry, have fallen 2.7% so far this year. That compares to a 3.1% increase in overall retail sales, excluding autos and gasoline.
Steve Sadove, former CEO and chairman of Saks and now senior adviser for MasterCard, says that Barneys New York didn't keep up with the changing spending habits.
"Barneys is a narrow niche brand. It was very fashion-forward and it was always geared toward the West Coast and East Coast customer," he said. "That customer has shifted. It's very hard to support a large business just on a fashion-forward base." Sadove believes that a licensing deal with Saks Fifth Avenue is an attractive one.
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