Barneys New York is not for sale, hopes to resolve its issues with factors in a few weeks and intends to have a new chief executive officer in place by midyear.
So says David Jackson, chief executive officer of Istithmar, the Dubai-based parent of Barneys, in a wide-ranging interview from Dubai on Monday.
In addition to battling the recession, sharp declines in luxury spending, and lately a handful of factors — including Hilldun Corp. and Rosenthal & Rosenthal Inc. — that have stopped approving shipments, Barneys has been dogged by speculation that Istithmar wants to unload the business amid mounting financial pressures.
But on Monday, Jackson went on the defensive, flatly denying the for-sale rumors and even contending Barneys is outperforming the competition.
“There are a lot of rumors about Barneys, about what’s going on. All of these are unfounded and unwarranted,” Jackson said. “Barneys is owned by Istithmar and will continue to be owned by Istithmar and will do everything it can to protect that investment.
“I would say most of those [factor] inquiries are general things, about the overall health of the industry…. Some of the requests coming from factors are unwarranted.”
So what do the factors want? “Some of it is as simple as providing some information; some things are more tangible in terms of support,” meaning financial support. Asked how many factors are at issue, Jackson replied, “Management has indicated to us there are four or five conversations they want us to have.
“I most want to put to rest any concerns that these factors have so Barneys’ management can focus on running the business and not on idle speculation about the financial strength of Barneys or concerns about Istithmar standing behind Barneys,” added Jackson.
While there have been a few reports of payment delays, Barneys, Jackson argued, “has met all of its obligations. Barneys continues to pay people. We have done all of the things we are supposed to do. Some of the factors have made requests for additional support. It’s not universal. We will do what we think is reasonable [regarding] those requests,” to ensure timely deliveries to Barneys stores.
“Factors play a major role in the industry. We’re hopeful they will be responsible here and recognize Barneys is a major player. Barneys has continued to pay the factors and will continue to. Everyone is on edge given the state of the economy. We don’t think [the factors issue] is Barneys specific. It’s the industry that’s suffering now…. If appropriate, we will provide some level of support to make sure Barneys is not at a competitive disadvantage.”
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