- Bankrupt Barneys officially sold to Authentic Brands Group on Friday morning, following approval from bankruptcy judge Cecelia G. Morris on Thursday, according to court documents.
- 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.
- “Over the past several months, we have worked diligently with the court, our lenders and creditors to maximize the value of Barneys in this sale process, and we continue to work with all relevant parties towards the best solution for Barneys’ employees, designers and vendors, and customers,” a Barneys spokesperson told Business Insider on Thursday.
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Barneys officially sold its remaining assets to Authentic Brands Group on Friday, according to court documents. 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.
However, 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."
On Thursday, a Barneys spokesperson confirmed the ruling to Business Insider and expressed hope of the chance a competing bidder would step up to prevent liquidation before the deal was finalized, which ultimately failed to come to fruition.
"Over the past several months, we have worked diligently with the court, our lenders and creditors to maximize the value of Barneys in this sale process, and we continue to work with all relevant parties towards the best solution for Barneys' employees, designers and vendors, and customers," the spokesperson said on Thursday.
In a leaked memo obtained by Business Insider on Thursday, Barneys CEO Daniella 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."
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.
https://twitter.com/JakeHeffez/status/1190275891521376256?ref_src=twsrc%5Etfw
Representative for Barneys, ABG, and Ben-Avraham were not immediately available for additional request for comment on Friday.
If you are a Barneys employee, contact this reporter at [email protected].