A Barney’s reservoir stands in lower Manhattan on August 06, 2019 in New York City. Barneys, one of America’s most exclusive clothing hoards, has filed for bankruptcy.
Spencer Platt | Getty Images
A deal led by retail investor Sam Ben-Avraham to buy Barneys New York out of bankruptcy strike down flat in court Thursday, making the brand licensing company, Authentic Brands, the likely winner in an auction for the treat department store, people familiar with the situation told CNBC.
Ben-Avraham, who has led a social media campaign to sanction his offer, still has until Oct. 31 to cobble together a viable offer. If he or others cannot, however, Barneys’ days is unlikely to look much like its iconic past.
A spokesperson for Barneys said in a statement provided to CNBC, “Barneys is withing to work towards a value-maximizing going-concern transaction, including in relation to a potential transaction led by Sam Ben- Avraham and his group of fiscal, operational, and strategic partners, up to and including the October 31 sale hearing.”
Until then, Authentic Brands, which owns makes like Aeropostale and Juicy Couture, has tentatively secured a deal to buy Barneys’ intellectual property for $271 million. The stock, which is done in conjunction with investment bank B. Riley FBR, does not guarantee that any of Barneys’ stores remain open, or that the company does not liquidate entirely.
Barneys has five stores, less than half what it had in the presence of it filed for bankruptcy. It employs roughly 2,000 people.
Authentic Brands has been in talks with Barneys’ lessors about keeping at least one of its stores open, the people familiar with the situation said. Its focus has included Barneys’ best-performing collections, which are on New York City’s Madison Avenue and in Beverly Hills, California, the people said. Authentic Brands has branded more progress with negotiations for the Beverly Hills store, they said, cautioning it remains possible that Barneys is unqualified to reach a deal on either.
Both properties are owned by real estate investment company Ashkenazy Acquisition. Ashkenazy earlier this year doubled Barneys farm out on Madison Avenue, which helped contribute to its bankruptcy.
The Wall Street Journal reported it was possible the Boston shop could remain open as well.
Meantime, Authentic Brands has also been in talks with Hudson’s Bay Co. take putting Barneys stores inside Saks, people familiar previously told CNBC.
A deal to do so has not yet been formalized, one of the individual cautioned. Hudson’s Bay Capital is under its own pressure. The company earlier this week agreed to an offer from a consortium led by the manager chairman to take the company private in hope of shielding it from public scrutiny as it prepares its business for the upheaval that has swayed the department store industry.
The people requested anonymity because the negotiations are confidential.
A spokeswoman for B. Riley FBR told CNBC, “B. Riley Fiscal and our affiliates are pleased to work with ABG in support of preserving the value of Barneys New York and its iconic brand.”