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The Week Ahead: Ending Barneys’ Bankruptcy Saga and Trade Talks Inch Forward

Will Authentic Brands Group secure final court approval to buy Barneys, or will Sam Ben-Avraham’s group sneak in with an 11th-hour deal? There’s further progress in the “phase one agreement” in the trade talks between the U.S. and China, but what that entails is still unclear. And finally, the U.K. hopefully will get some word on its new exit deadline from the European Union.

Barneys New York: The saga of who will own Barneys fits into the familiar mantra of “it’s not over until its over.” Although Authentic Brands Group was deemed the winning buyer on Thursday, the brand management firm still needs court approval before it can close on the deal and a hearing is set for Thursday.

It isn’t too late for ABG’s closest competitor, a consortium led by trade show operator and Kith investor Sam Ben-Avraham, to sneak in at the 11th hour and try to usurp Authentic Brands’ bid. The fashion mogul’s advantage is a promise to keep stores open–and save 800 jobs–but the drawback all along has been the need to chase down financing to complete a viable deal.

Tariffs: On Friday the U.S. Trade Representative’s office reported progress in talks between the U.S. and China as they finalize portions of a trade agreement. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin have been working on an “initial phase” of the agreement, disclosed on Oct. 14, with Chinese Vice Premier Liu He. President Trump called the phase one agreement “very substantial.”

And while that agreement did table the tariff increase planned for Oct. 15–it would have raised tariffs on $150 billion of Chinese imports to 30 percent that were already taxed at 25 percent–the truce has had no impact on the apparel and footwear duties that went into effect on Sept. 1.

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Brexit: So far, the European Union leaders supposedly agreed to give the U.K. a Brexit delay, but it hasn’t yet given the nod to a three-month extension. The U.K. was set to leave on Oct. 31, but now it’s awaiting a new departure date. The new wrinkle seems to be U.K. Prime Minister Boris Johnson’s demand for a general election before the Christmas holiday–a matter that has EU leaders debating just exactly how much time to allow for an extension.

Holiday 2019: According to a survey from the National Retail Federation, consumers said they will spend an average of $1,047.83 this holiday season, up 4 percent from the projected spend of $1,007.24 last year. In addition, shoppers between the ages of 35 and 44 said they plan to spend the most at $1,158.63.

“Consumers are in good financial shape and willing to spend a little more on gifts for the special people in their lives this holiday season,” Matthew Shay, NRF president and CEO, said. He’s expecting retailers will import near-record volumes of merchandise ahead of the tariffs on Chinese imports that’s set to take effect on Dec. 15.

The NRF survey follows an earlier annual holiday spending forecast projecting holiday sales in November and December to rise between 3.8 percent and 4.2 percent, for a total sales volume between $727.9 billion to $730.7 billion.

Consumer Confidence:  The University of Michigan’s consumer sentiment survey on Friday came in at 95.5. Sam Bullard, Wells Fargo’s senior economist said that while sentiment has fallen from its peak, it is still at a level “consistent with solid consumption growth.” Consumers, he noted, “remain largely focused on their income and job prospects.”