Will Barneys find success setting up shops inside Saks Fifth Avenue?
A buyer has emerged in Barneys’ bankruptcy proceedings with the intention of opening Barneys shops inside Saks.
The purchaser would be Authentic Brands Group, the licensing company that owns Aeropostale, Juicy Couture, Herve Leger, Nine West, Spyder and Frye, as well as a number of celebrity names and Sports Illustrated. The bid, worth $271 million in cash, is being done with B. Riley Financial, according to a court filing.
As part of the deal, Saks-owner Hudson’s Bay Co. (HBC) would reportedly license the Barneys name and open Barneys in-store shops inside Saks locations. Barneys is seen as hipper and edgier than Saks and could help Saks reach younger consumers. Saks just marked its ninth consecutive quarter of same-store sales and is the top performer among HBC’s brands.
HBC would also operate the Barneys website. As noted by Retail Touchpoints, the sale to Authentic Brands aligns with comments from Barneys’ EVP and Chief Digital and Technology Officer Katherine Bahamonde Monasebian at eTail Boston in August indicating the luxury retailer was seeking a “digitally focused” acquirer to guide its future.
All seven of Barneys’ remaining stores would close as part of the Authentic Brands Group plan, according to court papers, although sources told The Wall Street Journal there is a possibility that some may remain open depending on talks with landlords. A CNBC report said Authentic Brands may to carve out smaller space in top properties.
Barneys’ top source of revenue by far was its Madison Avenue flagship, followed by online and its store in Beverly Hills. Barneys traced its August bankruptcy filing to a move by its primary landlord to double its rent last year.
Authentic Brands will serve as the stalking horse bidder in the bankruptcy case, guaranteeing it will buy the retailer and setting a base offer for an upcoming auction set October 24.
Sam Ben-Avraham, who founded the hip New York store, Atrium, in the 1990s as well as the streetwear brand, Kith, and also operates fashion trade shows, has expressed interest in making a bid at the auction.
- Notice of Entry Into Stalking Horse Purchase – U.S. Bankruptcy Court Southern District of New York
- Barneys could launch more stores inside Saks in Authentic Brands deal – CNBC
- Authentic Brands Teams With Saks to Bid for Barneys – The Wall Street Journal
- Barneys nears bankruptcy deal with Authentic Brands, Saks owner: sources – Reuters
- Barneys Enters Deal To Sell Assets To Authentic Brands, B. Riley For $271 Million – Retail Touchpoints
- Barneys’ Stalking-Horse Bid Sets Stage for Suitors – Women’s Wear Daily
DISCUSSION QUESTIONS: Do Barneys-themed in-store shops inside Saks stores make sense for Saks and Barneys? Do you see a better path for Barneys to capitalize on its equity?