The bankruptcy saga of Barneys New York, the famed department store, involved executives crisscrossing the globe, all-night strategy sessions, last-minute alliances and attempts to sway public opinion.
But after all that, at a court in Poughkeepsie, N.Y., on Friday, it was sold for parts, ending an era in New York retail.
Authentic Brands Group will take control of the Barneys name — one that has been part of the Manhattan landscape since 1923 — and license it to Saks Fifth Avenue. The financial firm B. Riley is preparing to liquidate Barneys’ high-end wares at its five stores and two Warehouse locations, starting with private sale events for Barneys’ “most loyal” shoppers next week.
In announcing its acquisition on Friday, Authentic Brands said it was “building a business model that will adapt this legendary brand for the future of experiential luxury.”
The retailer’s flagship store at 61st Street and Madison Avenue in Manhattan will be “evolving” into a “pop-up retail experience,” which will feature a mix of boutiques, art and cultural installations and “entertainment that fosters creativity and community,” the company added.
Authentic Brands also said that it had cut a deal with Saks that would introduce Barneys “shop-in-shops” at Saks stores in the United States and in Canada. Customers will be able to see the unusual pairing of rivals at Saks’ New York flagship store, where a new version of Barneys New York will roll out on the fifth floor.
Barneys filed for bankruptcy in August. Until the last minute, the chain’s management held out hope for another buyer to emerge, but despite a series of unexpected twists and breathless reprieves, one did not appear.
B. Riley will liquidate stores through its Great American Group unit and an outside firm. In a statement Friday, the liquidator said shoppers could also participate on Barneys’ website, but it did not specify how long the sales would continue. It will honor gift cards until Nov 7.
About 2,300 jobs — including those of 2,100 full-time employees — hang in the balance. Daniella Vitale, the chief executive of Barneys, resigned on Friday.
“I am deeply sorry for all you have been through in the past year,” Ms. Vitale wrote in a letter to employees. “Please understand we tried very hard to keep this out of court and to find a solution before filing.”
She added, “While there are things I might have done differently, I don’t believe it would have changed the end result.”
Barneys’ stores once represented a very specific, and mythic, Manhattan ethos; it was the first to introduce names such as Armani, Alaia, Comme des Garcons, Louboutin and Zegna. And retail watchers will probably be arguing for years over what, or who, was to blame for the disappearance of what was once a cultural landmark.
Sam Ben-Avraham, the retail and trade show entrepreneur, had been talking about entering a rival bid until Thursday evening.
“Unfortunately, we failed to convince enough people in the business community that it made economic sense to keep Barneys alive,” he said in a statement posted on Instagram on Friday. “We understood from the beginning that looking at spreadsheets and numbers, it did not make sense, but we saw a future beyond that.”
No one else did.
“Barneys to New York is like Macy’s — it’s more than just a department store, it’s part of the culture of New York City,” Robert Feinstein, a lawyer representing Barneys’ unsecured creditors, said in bankruptcy court on Thursday.
“They have the Warehouse there, they have their wonderful windows at the holidays on Madison Avenue. We’re going to lose all of that today, and I think with a little more time, we might have preserved it.”
Ms. Vitale, the company’s former chief executive, spent much of the summer meeting with potential purchasers. Gene Pressman, the member of the Barneys founding family who had driven the store’s expansion into women’s wear and masterminded its Madison Avenue location, considered jumping back into the fray “for about five minutes,” he said.
He chose not to because of the company’s onerous real estate issues.
By the middle of October, it had only attracted a single qualified bid and the proposal was grim: Authentic Brands and B. Riley were prepared to liquidate and close all seven of the stores and license the Barneys name to Saks, as the company announced on Friday.
To Barneys loyalists, this was akin to sacrilege. Authentic Brands is known for buying the intellectual property of flailing retailers, then turning a profit by licensing their names to other companies for new products and earning royalties from those sales, typically without the bother of rent, store staff and inventory.
The bankruptcy of an icon was one thing; trading on the Barneys name while plundering its infrastructure and soul was another.
A “Save Barneys” movement started, with employee support, and Barneys and its lawyers desperately sought other bidders who might be willing to keep at least some of the chain intact. The most vocal contender was Mr. Ben-Avraham, an investor in the streetwear brand Kith and founder of a number of trade shows, who viewed Barneys as a New York landmark that could be reconceived as a new kind of shopping destination.
But alternate bids did not materialize.
Now, as the liquidation sale proceeds, the formerly proud Madison Avenue flagship, which has recently felt empty, may once again be briefly full of shoppers. This time, they will be searching for a bargain on cut-price Prada bags, Jil Sander shirts and Thom Browne suits before the holidays. And the emporium that once defined a certain kind of New York style will instead join its department store graveyard.
“In the end, it’s tragic,” said Julie Gilhart, the president of Tomorrow Consulting, who was fashion director of Barneys from 1992 to 2010. “If ever there was a time for a store that leads through fashion and new ideas from a creative artistic, irreverent lens, it’s now.”
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