DICKSON’S PLAN FOR BARNEYS: INVESTMENT, NOT TAKEOVER
Byline: Vicki M. Young
NEW YORK — Dickson Concepts Ltd. is planning an investment in Barneys New York — not an outright takeover — and if it does make an offer, must reportedly do it by Feb. 15, 1997.
Dickson’s strategy was announced by Barneys on Tuesday, after Dickson filed court papers Monday in Manhattan bankruptcy court requesting up to $1 million in advance reimbursement for costs covering a due diligence, or review, of Barneys’ operations. The timetable for submitting the investment was disclosed by a source close to the case.
An offer by Dickson in February to invest in Barneys could trigger a bidding war at that time.
Companies considering a play for Barneys include Saks Fifth Avenue, Neiman Marcus Group and, reportedly, Paris-based LVMH Moet Hennessy Louis Vuitton and Toronto-based Holt Renfrew.
The court papers made official what everyone has known for some time — that Dickson, the Hong Kong-based retailer and owner of Harvey Nichols in London, is Barneys’ potential white knight.
Initially, Dickson sought to keep its role in Barneys a secret. It also wanted to keep sealed the pleadings connected to its fee request. A hearing on the secrecy bid was held Sept. 25, and Bankruptcy Court Judge James L. Garrity denied the request on Oct. 23.
According the Barneys statement, its agreement with Dickson calls for an investment in Barneys, but it could not be determined whether that investment would give Dickson majority control.
The agreement for reimbursement, which has the support of the creditors’ committee, calls for the submission of a proposal for the recapitalization of Barneys at the completion of the due diligence. That proposal, when completed, would include “the terms and conditions of its investment in Barneys.”
Dickson is seeking to get paid up to $1 million for expenses in connection to the due diligence. The reimbursement includes the costs of preparing non-confidential and confidential information. Non-confidential information will be made available to other potential investors. Even if Dickson fails to submit a proposal, the source said, this arrangement is good for Barneys because it would help the bankrupt chain disseminate that information to other potential investors.
The source also said Dickson will retain KPMG Peat Marwick as its consultant.
Meanwhile, Dickson is building up a war chest.
On Nov. 7, Dickson Concepts announced it would spin off its cigarette lighter unit, raising about $200 million. The public offering is set for the first week of December in Paris.
Dickson Concepts had profits of $51.2 million on sales of $510 million for the fiscal year ended March 31, 1996.
The bankruptcy court is expected to set a hearing date soon on the request for the advance in fees. Assuming the request is granted, and Dickson decides to make an offer, that offer could come as early as six weeks later, according to Barneys.
Barneys filed for Chapter 11 bankruptcy protection on Jan. 10 and is embroiled in a dispute with Isetan, the Japanese retail conglomerate, over the nature of their partnership. Barneys claims that Isetan is an equity partner, while Isetan has maintained that it is Barneys’ landlord for the three flagships, in Beverly Hills, Chicago and on Madison Avenue.