Signage for Barneys

Barneys New York is closer to getting its stalking-horse bidder — but the future of the bankrupt company’s stores remains in doubt.

An attorney for the luxury retailer told New York bankruptcy Judge Cecelia Morris today that it was finalizing an official bid that is tied to a lender that has supported the company while it works through the Chapter 11 process.

At the time of the hearing, the stalking-horse agreement wasn’t finalized and the debtor-in-possession lenders extended their deadline to the company until 5 p.m. Barneys is expected to file confirmation with the court that an agreement has indeed been reached.

The retailer’s attorney Chad Husnick of Kirkland & Ellis LLP told the court that the retailer would continue its efforts to see if it could keep any physical stores open as part of the agreement.

“These are not easy negotiations, there’s a lot of pressure and posturing going on,” Husnick told the court.

Details of the bid were not disclosed in court, but a source close to the process confirmed that the bid comes from intellectual property firm Authentic Brands Group. The source said the terms of the deal were still being negotiated and that document — submitted late yesterday — was still being reviewed. ABG is said to be working with B. Riley Financial Inc., which could help liquidate Barneys’ inventory, and is one of the retailer’s two DIP lenders, along with Brigade Capital Management.

A representative for B. Riley declined to comment Tuesday.

The race to buy Barneys took a decisive turn on Monday, after a whirlwind weekend when ABG worked to put together a nearly $270 million bid to purchase the Barneys name and potentially license it for use at Saks Fifth Avenue stores.

The details of the bid were still forming less than a day before Barneys was due back before Judge Morris in Poughkeepsie, N.Y.

ABG, which is led by Jamie Salter, does still face competition. Trade show veteran Sam Ben-Avraham had been trying to line up a bid, although that did not materialize. Factor Gary Wassner, who has long supported designers shipping to Barneys, has also been trying to pull together a bid.

The company is expected to go to the auction block on Oct. 24, with bids due two days earlier.

However, anyone wanting to buy Barneys and maintain its current structure would have to secure concessions from Barneys’ landlords. Barneys’ rent, particularly at its Madison Avenue and Beverly Hills flagships, was a subject of negotiations with potential bidders in recent weeks.

It’s possible the Madison Avenue store could stay open, but occupy fewer floors.

But one way or another, the process promises to bring big-time changes to Barneys, which for decades has been seen as the retail home for ultra cool fashions.

Barneys’ path during its bankruptcy so far has been shaped in part by the role of its DIP lenders, who supplied the bankrupt retailer with a $217 million DIP loan that helped pay down its secured pre-petition debt. The DIP lenders also provided a $40 million consignment facility to help pay vendors shipping to Barneys during the bankruptcy.

Meanwhile, some of the company’s bankruptcy expenses are also starting to come into view. On Tuesday, Barneys’ attorneys from Kirkland & Ellis filed a fee statement for September seeking a little over $1 million in compensation for its work that month. The firm had previously sought more than $1.5 million in legal fees and expenses for its work since Barneys’ bankruptcy filing on Aug. 6 through Aug. 31, according to court papers filed earlier this month.

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