Another chapter begins in Barneys' tumultuous financial history--and, happily, this one's looking more promising.
According to a release, Perry Capital, one of Barneys' financial backers, has just become the majority owner of the company in a deal that reduces Barneys' whopping $590 million debt to a mere $50 million. As per the new agreement, Perry Capital, owned by Richard C. Perry, and The Yucaipa Companies, owned by Ronald W. Burkle, will partner to convert debt for equity in Barneys--meaning that both financiers' now hold a considerable stake in the company, though Perry Capital is still the majority owner.
The deal will bring Barneys significant financial flexibility and the ability to grow their business--something that's been tough in the past as the retailer has struggled with massive debt for decades, even filing for bankruptcy in the nineties. The agreement comes just in the nick of time too--according to the New York Times, Barneys was at risk for filing for chapter 11 again, and they had a September due date for a $200 million credit line looming over their heads.
Among the plans the company has to improve its position in the market, thanks to the recent influx of cash, is to further enhance customer experience--so hopefully that means we can expect more fun things like Gaga's Workshop to happen. According to the New York Times, it also means a new website will be introduced in a few weeks and that the ground floor will be renovated by September.
As for Barneys' new majority owner, Richard Perry, the financier has more than just a financial interest in the retailer. His wife, Lisa Perry, is a designer whose line was just picked up by Barneys this very year. Back in February, the Daily News' Gatecrasher column ran an item citing a "Wall Street insider" as saying Barneys' promoting Lisa Perry was "more about politics than fashion." Make of that what you will.