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Barneys officially sells to Authentic Brands Group in a deal that is expected to close most of the luxury chain’s remaining stores, leaving 2,000 jobs in uncertainty, Business Insider

Barneys officially sells to Authentic Brands Group in a deal that is expected to close most of the luxury chain’s remaining stores, leaving 2,000 jobs in uncertainty, Business Insider

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Barneys has a new owner, which likely means the end for most of its stores.

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Barneys has a new owner, which likely means the end for most of its stores.
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REUTERS/Shannon Stapleton
  • Bankrupt Barneys officially sold to Authentic Brands Group on Friday morning, following approval from bankruptcy judge Cecelia G. Morris on Thursday.
  • The deal as it stands will lead to the shuttering of most of Barneys’ remaining stores. However, the flagship location in New York City will remain open for at least the next year, according to Daniel Levy, president of the Ashkenazy Acquisition Corporation, which owns the flagship property.
  • A Barneys spokesperson confirmed that the deal officially closed in a statement to Business Insider on Friday, noting the company did everything it could to prevent liquidation. “Over the past several months, we have worked diligently with the court, our lenders and creditors to maximize the value of the Barneys assets and we’re pleased to have reached the conclusion of this process,” the spokesperson said.
  • “ABG will leverage its international scale, marketing expertise, and network of best-in-class partners to grow Barneys New York’s global presence across retail, including pop-ups, shop-in-shops, eCommerce, and a new freestanding store in a key U.S. market,” a representative for ABG said in a statement on Friday.
  • Visit Business Insider’s homepage for more stories.

Barneys officially sold its remaining assets to Authentic Brands Group on Friday. The deal is expected to shutter most of its remaining stores and leave 2,000 jobs in the balance.

Under the ruling – which was approved by bankruptcy judge Cecelia G. Morris on Thursday – Authentic Brands Group will assume ownership of the luxury department store, following several weeks of courting potential bidders. The deal as it stands will likely call for the closure of most of Barneys’ remaining locations, and the brand name is slated to be licensed to Saks Fifth Avenue.

“This is a sad day,” Morris said at the Thursday hearing, according to the Wall Street Journal. The shuttering of the remaining stores may lead to layoffs for some 2,000 employees.

A Barneys spokesperson confirmed that the deal officially closed in a statement to Business Insider on Friday, noting the company did everything it could to prevent liquidation.

“Over the past several months, we have worked diligently with the court, our lenders and creditors to maximize the value of the Barneys assets and we’re pleased to have reached the conclusion of this process,” the spokesperson said. “We want to thank all of our hard-working employees, talented designers and vendors, and our loyal customers for being part of the storied history and iconic brand that is Barneys New York.”

Despite the ruling, the New York City flagship store is expected to stay open for at least the next year, according to a statement sent to Business Insider by Daniel Levy, president of the Ashkenazy Acquisition Corporation, which owns the flagship Barneys properties in New York City and Los Angeles.

According to Levy, the New York and Los Angeles stores bring in $20 million and $30 million, respectively, and the company is “extremely disappointed by the outcome of today’s proceedings.”

“We have come to terms with Authentic Brands Group, Barneys new owner, to keep the Madison Avenue store open in a smaller footprint for the next 12 months while we continue to explore longer term solutions,” Levy said in the statement. “Fred’s will remain open as well. We are saddened by the loss of jobs for Barneys employees and the iconic standalone brand.”

A spokesperson for ABG described the company’s plans for Barneys’ future in a statement on Friday.

“ABG will leverage its international scale, marketing expertise, and network of best-in-class partners to grow Barneys New York’s global presence across retail, including pop-ups, shop-in-shops, eCommerce, and a new freestanding store in a key U.S. market,” the spokesperson said. “Its initial focus will be on high-fashion collaborations, branded namesake products, and expanding international retail in both brick and mortar and eCommerce. There is also a strategy in development for Freds to export this beloved eatery to luxury destinations around the world.”

The spokesperson continued: “ABG also looks forward to joining forces with Saks Fifth Avenue, the ultimate luxury retail destination for exploration and discovery of new fashion, as the exclusive Barneys New York retail and eCommerce partner, for both Barneys.com and BarneysWarehouse.com, in the U.S. and Canada.”

In the wake of the sale on Friday, Barneys CEO Daniella Vitale announced she will also step down from her role after nine years at the helm, the Barneys spokesperson confirmed.

In a leaked memo obtained by Business Insider on Thursday, Vitale shared news of the approved deal with Barneys employees, saying that the chances of an additional bidder rising up in the brief window of time was “small.”

“We have all worked very hard to avoid this outcome,” Vitale wrote at the time. “I understand this has been a long and uncertain process, and I want to thank you all for your focus and dedication to keeping Barneys moving forward.”

‘I apologize if I have failed anyone’

Kith cofounder and owner Sam Ben-Avraham was in the running to purchase the beleaguered luxury department store but eventually pulled out, ceding the race to ABG. In an Instagram post shared by Ben-Avraham on @savebarneys – an account he created during the bidding war to highlight his focus on protecting the store from liquidation – he said pulling out of the deal was one of the the most difficult decisions he has made.

In Instagram Story posts, Ben-Avraham wrote that his team still feels “very strongly about Barneys: what it stands for and what it could mean in the future” and they believe “it has its place in New York’s landscape and beyond.”

“Unfortunately, we failed to convince enough people in the business community that it made economic sense to keep Barneys alive,” he wrote in the post. “Some unexpected road blocks were put in our way. We understood from the beginning that looking at spreadsheets and numbers, it did not make sense but we saw a future beyond that.”

He continued: “We knew that once we overcame that hurdle there would be light at the end of the tunnel. I apologize if I have failed anyone, and gave anyone false hope by not being able to close the deal. I know this chapter is about to be over and not the way I wished or imagined. I hope something greater will come from it.”

A representative for Ben-Avraham did not immediately return Business Insider’s request for comment on Friday.

Both individuals in attendance at the court hearing and Barneys fans alike took to social media in the aftermath of Thursday’s hearing to comment on what is now an end of an era for the store.

“There was a palpable sense of loss, even more so than in a typical bankruptcy case, and after the judge left the room the stunned silence gave way to quiet sobs,” The Fashion Law Institute, a nonprofit organization based at Fordham Law School, tweeted on Thursday.

Read the full statement from ABG:

Authentic Brands Group (ABG) has completed the purchase of the intellectual property (IP) of Barneys New York. Through this acquisition, ABG enhances its luxury footprint and makes its foray into experiential luxury and entertainment.

As ABG welcomes Barneys New York into the fold, it is building a business model that will adapt this legendary brand for the future of experiential luxury. ABG is committed to preserving the legacy of Barneys New York while positioning it for long term growth through key partnerships that will expand its global presence as a lifestyle brand and luxury retail experience.

ABG will leverage its international scale, marketing expertise, and network of best-in-class partners to grow Barneys New York’s global presence across retail, including pop-ups, shop-in-shops, eCommerce, and a new freestanding store in a key U.S. market. There is a vision to create multisensory experiences that will usher Barneys New York into a new era while staying true to the brand’s DNA. Its initial focus will be on high-fashion collaborations, branded namesake products, and expanding international retail in both brick and mortar and eCommerce. There is also a strategy in development for Freds to export this beloved eatery to luxury destinations around the world.

ABG also looks forward to joining forces with Saks Fifth Avenue, the ultimate luxury retail destination for exploration and discovery of new fashion, as the exclusive Barneys New York retail and eCommerce partner, for both Barneys.com and BarneysWarehouse.com, in the U.S. and Canada. Saks is working to best understand what customers love about Barneys to evolve it into a new interpretation that is relevant for today’s luxury consumer. The first order of business will be to reboot Barneys New York on the fifth floor of Saks Fifth Avenue’s newly renovated New York City flagship. Barneys New York at Saks is planning to launch as shop-in-shops in key Saks markets in the U.S. and Canada. ABG is excited to partner with the Saks Fifth Avenue management team as the new Barneys New York at Saks rolls out.

In addition to ABG’s purchase of the Barneys New York IP, its plans following the transition sale include evolving the Madison Avenue location into a pop-up retail experience, bringing together an eclectic curation of boutiques, art and cultural installations and exhibits, and entertainment that fosters creativity and community.

The acquisition will maintain the current licensing agreement between Barneys New York and Seven & i Holdings, which operates 12 Barneys New York retail stores in Japan. The Japan stores will continue operations as usual.

If you are a Barneys employee with a story to share, contact this reporter at bbiron@businessinsider.com.








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