Barneys New York’s profits failed to keep up with expenses in September, leading the high-end chain to an $8.6 million loss last month.
The bankrupt luxury chain posted net revenues of $52.9 million for the month ended Oct. 5, according to a filing in a Manhattan bankruptcy court. Though gross profits reached $23 million, expenses put its bottom-line figure in the red with the net loss at $8.6 million. Barneys owes a total of $7 million to vendors, the report added.
Meanwhile, Authentic Brands Group has been named the stalking-horse bidder as the bankrupt firm edges closer to a bankruptcy court auction on Oct. 24 where its $270 million offer has emerged as the one to beat. There’s still a chance that trade show operator and Kith investor Sam Ben-Avraham might choose to come in with a competing bid before the Oct. 22 deadline to submit a rival offer, although that seems to largely depend on whether his group can secure the financing in time.
What isn’t clear is whether there’s been any resolution with Ashkenazy Acquisition, the landlord of Barney’s flagship locations on Madison Ave. and in Beverly Hills.
Barneys filed its voluntary Chapter 11 petition on Aug. 6. At the time, the retailer said it would keep its Madison Ave. location open, as well as doors in Chelsea in downtown Manhattan, Beverly Hills, San Francisco and Copley Place in Boston. It also planned at the time to keep open two outlets known as Barneys Warehouse in Woodbury Common and Livermore, along with its Barneys.com and and BarneysWarehouse.com operations.
Gone are the stores in Chicago, Las Vegas and Seattle, as well as five smaller concept stores and seven Barneys warehouse locations.
What happens now, presuming Authentic Brands is the ultimate victor, isn’t yet clear. The brand management firm is believed to be closing any other unprofitable location among the stores that Barneys intended to keep open. But that decision could also be determined by the final terms of the planned licensing agreement with Hudson’s Bay Co.’s Saks Fifth Avenue.
Authentic Brands plans to own the intellectual property assets of Barneys New York, and license out the name to Saks for shop-in-shops at select Saks stores. Saks would essentially become the store operator, and likely operate the Barneys locations that remain open. Sources said Saks plans to maintain Barneys’ online site.