This afternoon the gavel fell and the fate of Barneys was determined. Authentic Brands Group and B. Riley will be the new owners of Barneys and of all its assets and intellectual property for the price of $271 million.
ABG has been forthright that their purchase plan includes the closing of all Barneys’ locations — including its 275,000-square-foot flagship property owned by Ashkenazy Acquisition at 660 Madison Avenue.
“It’s a sad day,” said Judge Cecilia Morris as she determined the fate of Barneys, which includes the loss of 1,500 jobs and the end of an era for New Yorkers.
Jeff Trexler, attorney and associate director of Fashion Law Institute, based at Fordham School of Law, observed the proceedings and in an interview with Mad-Spy said, “There was a palpable sense of loss. The sense of losing more than a store. Barneys has been important to so many for much of its history.”
The question of how ABG will liquidate inventory remains a question. Texler told Mad-Spy that the jewelry vendors are among the only merchants that have prior authorization to retrieve its merchandise. That means that everything from Chanel shoes to YSL bags are up for grabs.
Some experts believe that ABG will keep stores open for a limited time and slowly reduce merchandise until most of it’s sold. Other experts believe that the most valuable inventory — from Louboutin to Gucci– will be sold behind the scenes.
The perception that Barneys is dead has to be factored into any decision, ” Trexler said. A fire sale will only diminish the value of the label, which will primarily be used for licensing.
Another expert with whom we spoke agreed that customers shouldn’t be too optimistic about paying pennies for Prada. “If ABG decides to liquidate its inventory, you can bet that the best merchandise will be removed. Off-price stores from TJ Maxx to Gilt are already placing offers,” he said. “At stores, you will most likely see the Coop brand reduced to liquidation values along with fixtures and odd accessories.”
The individual brands have worries about seeing major disicounts too. A comment noted that big companies, like LVMH, are attempting to buy back their merchandise in order to maintain control.
Inside sources say that all NYC employees have been called to a meeting on Friday morning. We anticipate that it will be a somber day.
On a personal note: The Madison Avenue Spy team is very thankful to all of our friends at Barneys. You have made our lives more colorful, stylish and fun. Our stories of shopping at Barneys and eating lunch at Fred’s will be told as a legend and be repeated to future generations. We wish everyone lots of luck and success and look forward to sharing new beginnings.