ISETAN PRETAX EARNINGS RISE 93% IN FIRST HALF
NEW YORK — Isetan Co. Ltd., the Japan-based retailer and partner in the Barneys New York expansion, reported a 93 percent increase in pretax profit for the first half ended Sept. 30 on sales growth of 8.8 percent.
For the six months, the company posted a pretax profit of $21.3 million (2.37 billion yen) against 1.23 billion yen for same period last year.
Isetan also reported a net profit jump to $95.5 million (10.63 billion yen) from 605 million yen for the same period last year due to a change in accounting policy on reserves for retirement allowances.
Sales increased to $1.89 billion (209.7 billion yen) compared to 192.82 billion yen a year ago.
The retailer forecasts earnings of 9 billion yen for the fiscal year ending March 31, 1997, with sales estimated at 440 billion yen. These forecasts reflect an upswing from the year-earlier loss of 31.8 billion yen after a 34.3 billion yen loss from the bankruptcy of Barneys Inc.
Barneys, in Chapter 11 bankruptcy since January, and Isetan have been disputing the nature of their partnership.
Barneys claims it signed an agreement with Isetan in March 1994 to convert Isetan’s claims into an equity stake in the upscale specialty retailer.
Isetan maintains it is the landlord on Barneys’ flagship stores in Beverly Hills, Chicago and on Madison Avenue here.
On Sept. 19, Barneys filed with the American Arbitration Association in New York to terminate the license agreements that allow Isetan to operate the highly profitable Barneys Japan.
An arbitration panel has been appointed and a decision is expected within the next few weeks on whether the arbitration will be held in New York or Japan.