A group of fashion executives have reportedly placed a $220 million bid to purchase Barneys New York, people familiar with the situation told The Wall Street Journal. The group is led by Sam Ben-Avraham, founder of Atrium and Kith, who is recruiting other retail veterans and brand investors to fund the bid.
A Barney’s lawyer stated that the company is in negotiations with a single buyer, but hasn’t named the party. The deadline for bids is Oct. 11.
Ben-Avraham’s bid is expected to include an asset-backed loan and cash that will be used to operate Barneys, according to one of the quoted sources. The deal also is expected to remove Barney’s current equity owners, including Perry Capital and Yucaipa Cos., and include an agreement with the landlord of the Madison Avenue and Beverly Hills stores.
Barneys filed for Chapter 11 bankruptcy in August and secured financing of $218 million from Brigade Capital Management and B. Riley Financial to pay its vendors and employees. The retailer has until Oct. 24 to find a buyer, or else it may face liquidation.
This marks the second time Barneys has filed for bankruptcy. The first filing was in 1996 after a dispute with its then-owner, Japan-based Isetan. The luxury retailer avoided another bankruptcy in 2012 when Perry Capital took control of the company through a $540 million debt-for-equity swap. While the fund closed in 2016, Perry Capital remains in control of the company.