Barneys Considers Buyout Proposal From Retail Investor Group

(Bloomberg) -- Luxury retailer Barneys New York Inc. is in advanced talks with a group of retail industry investors looking to buy the company out of bankruptcy for about $220 million, according to people with knowledge of the situation.

The effort is being led by Sam Ben-Avraham, known for his roles in starting New York retail store Atrium and streetwear brand Kith, the people said. They asked not to be identified discussing a private matter.

The bid is one of several that have emerged as the retailer seeks to find a suitor for its assets to avoid liquidation. Authentic Brands Group LLC has also been in discussions about acquiring the Barneys name, Bloomberg previously reported. The joint bid led by Ben-Avraham is the furthest along and it contemplates an asset-based loan and cash to keep Barneys operating, the people said.

The talks are continuing, and there’s no certainty that a deal will be reached, the people added. Any offer would need approval from the bankruptcy court.

Advanced Talks

“We are in advanced negotiations with a potential purchaser and intend to reach an agreement by next Friday,” Barneys said in an emailed statement.

Ben-Avraham couldn’t be reached for comment and Authentic Brands had no immediate comment. The Wall Street Journal previously reported the potential deal.

Barneys filed for Chapter 11 in August with plans to shutter most of its stores after getting squeezed by rising rents and fewer visitors. Its management has been seeking to sell a slimmed-down business and negotiate with its landlords through the court process.

The deal to rescue Barneys is expected to wipe out current equity owners including hedge fund veteran Richard Perry, who took control in 2012 in a debt-for-equity swap. At a bankruptcy hearing on Thursday, Judge Cecelia Morris extended the deadline for a definitive agreement until Oct. 11, which could be pushed out further depending on how talks advance. An auction for the assets is set for the end of the month.

The case is Barneys New York Inc., 19-36300-cgm, U.S. Bankruptcy Court for the Southern District of New York (Poughkeepsie).

To contact the reporters on this story: Katherine Doherty in New York at kdoherty23@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, Anne Riley Moffat

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