Barneys New York has reached a roughly $271.4 million stalking-horse agreement with Authentic Brands Group and one of its debtor-in-possession lenders B. Riley Financial Inc., the retailer said in a court filing late Wednesday.
The deal will set the baseline bid for any competing offers. An auction will take place by Oct. 24 at the New York City offices of Barneys’ attorneys at Kirkland & Ellis LLP, and the company may ask the New York bankruptcy court overseeing the proceedings to approve the sale at a hearing on Oct. 31, Barneys said in its filing.
The stalking-horse deal involves “substantially all” of Barneys’ assets, though it could exclude certain leases, the filing said. WWD previously reported that ABG’s plans would include taking on Barneys’ online business and licensing the Barneys name to Hudson’s Bay Co. Inc., potentially for use at Saks Fifth Avenue stores.
“Today’s development is a positive step forward for Barneys, and a strong recognition of the value of Barneys’ assets and brand name,” a Barneys representative said in a statement Wednesday. “We are encouraged by the stalking-horse bid by Authentic Brands Group in partnership with Saks Fifth Avenue.”
It’s unclear what the plans are of the other suitors who in recent weeks had voiced interest in Barneys, as the retailer scrambled to meet its deadlines with its debtor-in-possession lenders, Brigade Capital Management LP and B. Riley Financial, to avoid a liquidation.
Kith-backer Sam Ben-Avraham was said to have been interested in pursuing a going concern bid for Barneys, while factor Gary Wassner had also entered the fray, but it appeared that putting together the financing before Barneys’ lender-driven deadlines this month proved to be a challenge for both parties.
On Tuesday, Wassner tweeted his enduring hopes for the retailer: “All this crazy chatter in the press. I’m just trying to save Barneys as a very special retail experience, one that got lost over the past few years. It has real social and economic value as a semi-independent retailer. I have a vision for it to take the past into the future.”
A representative for Barneys indicated Wednesday that the company is also exploring its options with others who have shown interest.
“Additionally, we appreciate the ongoing interest by Sam Ben-Avraham and are actively pursuing additional options with those who have expressed their intent to submit bids during the upcoming auction process,” the representative said. “We are working hard to achieve a successful sale process that will preserve the integrity of this incredible brand and ultimately benefit our employees, customers, vendors and other business partners.”
Even as Barneys pursued its frenzied search for a stalking-horse bidder, the retailer continued to lose cash.
From Sept. 1 to Oct. 5, the company incurred a net loss of roughly $8.6 million, according to the company’s statement of operations filed late Tuesday in New York bankruptcy court. The retailer’s net revenues for the period amounted to $52.9 million, but its cost of sales totaled $29.9 million, and selling, general and administrative expenses were nearly $25.8 million, according to the filing. Its inventory was valued at roughly $190.1 million as of Oct. 5, according to the filing.
The company had disclosed in a previous monthly operating report filed in September that it had incurred a net loss of some $16.3 million during the period between Aug. 6, when it filed for Chapter 11 protection, to Aug. 31. It said at the time that its inventory was valued at nearly $192 million, and that it had about $10.3 million in cash on hand.