Barneys’ creditors are still holding out hope that an underdog bidder will keep the iconic luxury retailer’s doors open.
Ahead of a Halloween-day hearing to finalize the sale of Barneys, the retailer’s unsecured creditors demanded to review a second acquisition bid that would save the department store. But it is unknown whether the bid will even come in before the hearing.
660 Madison Avenue (Credit: Barneys)
The leading bidder appears to be Authentic Brands Group, which owns the intellectual property to numerous fashion brands. Last week ABG said it would jump in and buy Barneys’ intellectual property and partner with Saks Fifth Avenue to use Barneys’ name throughout its stores. The price of the deal is about $270 million.
Sam Ben-Avraham (Credit: Getty Images)
Meanwhile, another group of investors, led by Sam Ben-Avraham, submitted a lower bid. But in a statement filed Wednesday the unsecured creditors said Ben-Avraham’s group is revising its offer. The creditors asserted the right to consider it as a better offer than ABG’s based on factors other than price — namely, that it would keep stores open and jobs in place. ABG’s offer, they said, would essentially liquidate Barneys.
“From the outset of these cases, the Committee has been pushing to keep Barneys alive as a true going concern business with a maximum retail footprint because that would inure to the benefit of thousands of employees … as well as the thousands upon thousands of customers who visit Barneys,” the statement said.
Barneys, its bankruptcy attorney and representatives for Ben-Avraham did not immediately respond to requests for comment.
Barneys filed for Chapter 11 bankruptcy in August, claiming in part that recent rent spikes — particularly at its 275,000-square-foot flagship at 660 Madison Avenue — were too financially burdensome. Among Barneys’ top unsecured creditors are landlords Jenel Management, which co-owns 660 Madison Avenue with Ashkenazy Acquisition, and Thor Equities.
As part of its bankruptcy plan the retailer said it would shutter 15 of its 22 stores. On Instagram, Barneys confirmed last week that it had accepted the offer from ABG as a stalking-horse bid. But it also said it was still working with Ben-Avraham, whose deal would keep stores and barneys.com open.
Ben-Avraham’s team, which has yet to submit a revised bid, according to the statement, has launched a “Save Barneys” website and petition to raise public support for keeping Barneys alive.
Authentic Brands Group CEO Jamie Salter (Credit: Getty Images)
“Barneys as we know it will disappear. By signing this petition, you get us one step closer to ensuring that the corner of Madison & 61st Street continues to inspire people from around the world,” says part of a statement on the site.
The hearing to approve the sale is Thursday morning in Poughkeepsie, N.Y. and it is shaping up to be a showdown: Women’s Wear Daily reported Wednesday morning that Ben-Avraham’s investor group plans to submit another bid. And another team — David Jackson, the former chief of a firm that acquired Barneys in 2007, and a perfume retailer — also plans to submit a proposal to save the company, Jackson told the New York Post.
Write to Mary Diduch at md@therealdeal.com