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Barneys Gets Letters of Interest From Potential Buyers

At least five outside parties consider bidding for luxury retailer Barneys' assets, but more may be waiting in the wings for the bankruptcy auction.

(Bloomberg) -- Five potential buyers have sent letters expressing interest in all or part of Barneys New York Inc. as the bankrupt luxury retailer tries to sell assets and avoid liquidation, according to people with knowledge of the matter.

Two of the would-be suitors would want all of the assets, while others are interested in just parts of Barneys, the people said, asking not to be identified discussing the confidential process. At least one potential bidder is an investment firm with previous holdings in the retail industry, one person said.

Other parties have also indicated they will bid in the bankruptcy auction later this month, but didn’t want to submit letters that could become public before then, the people said. They didn’t identify the bidders.

A representative for Barneys declined to comment.

The upscale clothing retailer filed for Chapter 11 last month with plans to shutter most of its stores after getting squeezed by rising rents and fewer visitors. Its management seeks to sell a slimmed-down business and negotiate with its landlords through the court process. The company said when it filed that it had secured $218 million in financing and will continue to operate until it finds a buyer.

Lender Deadline

Barneys was up against a deadline under an agreement with its bankruptcy lenders to receive initial letters of interest by Sept. 25. The deadline for bidders to submit formal offers for the bankrupt retailer’s assets as part of the auction process is set for Oct. 24 with an auction no later than Oct. 29, according to court documents.

The upscale clothing retailer has expressed interest in finding a “digitally focused” partner to remain competitive in an evolving retail environment. It aims to emerge from bankruptcy with a stronger balance sheet and operating structure in place. Barneys post-bankruptcy vision also includes a more intentional push into food, entertainment and experiences, Katherine Bahamonde Monasebian, chief digital and technology officer, said in an interview with Bloomberg News.

Barneys is working with law firm Kirkland & Ellis LLP, investment bank Houlihan Lokey Inc. and M-III Advisory Partners LP through its bankruptcy proceeding.

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

(Updates with Barneys turnaround strategy in the seventh paragraph)

To contact the reporter on this story:
Katherine Doherty in New York at [email protected]

To contact the editors responsible for this story:
Rick Green at [email protected]
Dawn McCarty

© 2019 Bloomberg L.P.

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