Barneys Considers Bankruptcy Loan With Great American Capital
As cash has dwindled and bills go unpaid, advisers are looking to generate some cash for Barneys from its famous name.
(Bloomberg) -- Barneys New York Inc. is in talks with potential buyers of the rights to its name and trademarks as its advisers search for ways to salvage the luxury retailer, according to people with knowledge of the matter.
Potential buyers include Authentic Brands Group LLC, a brand management firm that has snapped up intellectual property from several retailers in recent years, said the people, who asked not to be named discussing private negotiations. Bankruptcy is a likely option for Barneys, and a filing could come as soon as Monday evening, they said.
As cash has dwindled and bills go unpaid, advisers are looking to generate some cash for Barneys from its famous name. A deal could involve selling the intellectual property to Authentic, and then leasing it back for as long as the business remains in operation, the people said.
“The Barneys New York Board and management continue to work constructively and collaboratively with a number of parties and are committed to reaching a mutually agreeable resolution to strengthen our business,” the company said in a statement. Authentic didn’t respond to a message after regular business hours.
Bankruptcy Loan
The retailer has been talking to third-party lenders as well as its existing bankers at Wells Fargo & Co. to secure a bankruptcy loan, which would keep Barneys running until a reorganization plan is worked out.
While the negotiations are not final, potential lenders include Great American Capital Partners, Gordon Brothers Group and Hilco Global, the people said. Representatives for those firms didn’t immediately respond to requests for comment. The involvement of Hilco and Gordon Brothers was reported earlier by the Wall Street Journal.
Without such a deal, as well as significant support and relief from its landlords, Barneys is at risk of running out of time to enact a turnaround and proceeding straight to liquidation, the people said.
Online retailer Farfetch also held discussions about buying Barneys, but no deal was reached, the people said. Officials at London-based Farfetch weren’t immediately available after regular business hours.
Barneys operates flagship stores in New York on Madison Avenue and in Chelsea, as well as Beverly Hills, Chicago, Seattle, Boston, San Francisco and Las Vegas. The chain has been hobbled by steeply rising rents and shoppers defecting to other outlets.
--With assistance from Katherine Doherty.
To contact the reporters on this story: Eliza Ronalds-Hannon in New York at eronaldshann@bloomberg.net;Lauren Coleman-Lochner in New York at llochner@bloomberg.net
To contact the editors responsible for this story: Rick Green at rgreen18@bloomberg.net, Boris Korby
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