On Friday morning, Authentic Brands Group officially became the new owner of Barneys New York in a $271 million deal that is expected to result in the closure of most if not all stores.
It's been quite a year for Barneys. One minute the 96-year-old luxury store is opening a (literal) high-end cannabis department and the next it's facing the very real possibility of closing its doors for good. Reports surfaced that the retailer was planning to restructure and was considering a bankruptcy filing in July, and it officially filed in August. Since then, it feels like there have been near-daily headlines touting nine-figure bids from investors to acquire the chain and declarations that it will close all seven of its locations.
To help you unravel what may have been Barneys' final days in business, we created a timeline of everything that's happened since that bankruptcy filing, what it's meant, and what is likely happening next.
Barneys Files for Bankruptcy
Pushed into financial distress by rising rents — especially at its Madison Avenue flagship, where rent had reportedly doubled to $30 million — and competition from Net-a-Porter and the like, Barneys filled for Chapter 11 bankruptcy protection on Tuesday, August 6, effectively putting itself up for sale. In its filings, it was revealed that Barneys owed millions of dollars to many of the luxury brands it carries, including $3.7 million to The Row and $2.7 million to Celine.
It gets financing to buy some time, but closes some stores
On the same day it filed for bankruptcy, Barneys secured a $218 million lifeline from Brigade Capital Management, $75 million of which it was granted immediate access to. As part of that deal, it closed five stores and seven off-price Warehouse locations, leaving five locations — including Madison Ave and Beverly Hills — open alongside its e-commerce channels Barneys.com and Barneyswarehouse.com. Barneys was also given an October deadline to find a buyer or liquidate.
Barneys announces its doors are still open
In early September, Barneys poked fun at its own bankruptcy with clever, tongue-in-cheek window campaign signs at its Madison Avenue flagship declaring "Not Closed" and "Barneys Til I'm Dead."
"Barneys has never been more relatable than it is right now," High Snobiety editor-in-chief Thom Bettridge, who helped create the campaign, told GQ, adding that "financial distress is a common American trope."
During bankruptcy proceedings, a bidder emerges
Authentic Brands Group was seen as a a strong contender to buy Barneys from the beginning, but there was always time for someone else to swoop in. Others who were rumored to be considering bids included Kith backer Sam Ben-Avraham, Nordstrom Inc. and Neiman Marcus parent company Ares. ABG, which owns a number of brands in fashion and retail including Juicy Couture and Nine West, said as early as September that it was interested in putting forth a bid. It did just that, and on Oct. 16, Barneys filed papers agreeing to sell its assets to ABG for roughly $271 million. This designated ABG as the stalking-horse bidder, meaning it would act as a reserve bid ahead of the official auction. Its plan would likely include the closure of all Barneys retail stores. Still, nothing is set in stone.
Another bidder emerges with hopes of saving Barneys
Shortly thereafter, Ben-Avraham launched a public campaign to raise the capital needed to make a bid for Barneys, making a plea on the now-defunct site SaveBarneys.com promising "a solution that doesn't involve mass layoffs and store closures." Others who were reportedly still putting together bids in late October included Steve Madden and former Istithmar CEO David Jackson.
ABG wins the auction
On Oct. 24, ABG put out a press release announcing that it had "emerged as the successful bidder to purchase the intellectual property of Barneys New York (Barneys)." Confirming the deal had been in motion for some time, the release outlined ABG's plans for Barneys, which would focus on "high fashion collaborations, namesake products, lively dining, and premium shopping experiences." It would also make Saks Fifth Avenue "the retail partner for the brand in the U.S. and Canada," suggesting that while Barneys standalone stores would close, it will have some sort of presence in Saks stores through a licensing partnership.
"As we explore opportunities for the brand as part of Saks Fifth Avenue, we are working to best understand what Barneys' customers love about the retailer as we evolve it into a new interpretation that is relevant for today’s luxury consumer," said said Marc Metrick, President of Saks Fifth Avenue, in a statement.
The sale was still subject to final approval from the United States Bankruptcy Court for the Southern District of New York, meaning, technically, another bidder might have had a shot if they came in with a better deal.
The court approves ABG's bid, but it's not set in stone
This did not happen, however. Ben-Avraham's bid was ultimately too low to qualify. On Oct. 31, the bankruptcy court approved ABG's $271 million bid, with the sale expected to close at 10 a.m. the following day.
"I think we can all agree this is a very sad day," the judge, Cecelia G. Morris, said at the end of the hearing, according to The New York Times.
Still, according to Forbes, Barneys sent out a statement saying other bidders could still come forward, suggesting Barneys' camp was not too thrilled with ABG's offer and plans.
"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," the statement reportedly said, "and we continue to work with all relevant parties towards the best solution for Barneys' employees, designers and vendors, and customers."
Barneys creditors also resisted ABG's bid in support of the chain's many retail and distribution center workers who would lose their jobs if said bid went through.
The deal is done as rival bids fail to materialize
It appears that Ben-Avraham was still trying to put together a last-minute bid to save Barneys, but made the decision Thursday night to pull out of the race. "This was one of the hardest decisions I have made in my life thus far," he wrote in an Instagram caption. "Unfortunately, we failed to convince enough people in the business community that it made economic sense to keep Barneys alive."
Jackson was also reportedly trying to put forth a last-minute bid with help from Arabian Oud, the largest fragrance retailer in the Middle East, but "couldn't get there by 10" according to the New York Post.
Also according to the Post, Barneys CEO Danielle Vitale officially stepped down on Friday morning.
ABG confirmed that its acquisition was finalized in a press release sent on Friday.
In the immediate term, The New York Times wrote Thursday: "The result could be eye-popping liquidation sales of luxury goods like handbags and dresses at all seven Barneys locations, perhaps starting as soon as this weekend."
Longer term, according to Friday's announcement, Barneys will end up with at least one store. "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." It also notes that "expanding international retail in both brick and mortar and eCommerce" will be a priority, and that Fred's, Barneys' dining concept, could also expand internationally.
As for the Saks Fifth Avenue partnership, there will be a "reboot" of Barneys on the fifth floor of Saks' New York flagship, which will be the first of several Barneys shop-in-shops within Saks locations in the U.S. and Canada.
As for Barneys' iconic Madison Avenue flagship, ABG says it will evolve the 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."
Barneys' 12 stores in Japan, which are operated by Seven & I Holdings through a licensing agreement, will remain open.
The liquidation of inventory and other assets will likely be handled by B. Riley, ABG's partner in the deal, while ABG will handle the licensing of the Barneys brand. It is not clear how long the remaining Barneys stores will keep their doors open.
While a legendary sale — and who doesn't love a sale — could be imminent, the industry will surely be mourning the loss of an iconic retail institution for some time. And many Barneys employees will likely be mourning their jobs.
Reps for Barneys did not immediately respond to our requests for comment. We will update this story as we learn more.
Note: this story was updated to include new details from ABG regarding the acquisition.