Dubai: Arabian Oud, a Saudi-based retail and real estate group, is in with an even chance to acquire Barneys New York, the legendary US department store now in bankruptcy proceedings. The Saudi entity has teamed up with Solitaire Partners to make a bid, said to be in the “area of $270 million”. The two could bring in a third investor if the bid proves a success.
Also, if this does prove the winning bid, the first Barneys stores in the region will open in Saudi Arabia.
“The bids are now with the court, and October 31 is the final day of submission,” said David Jackson at Solitaire Partners. “Arabian Oud came on as our primary backer, and we believe we have placed an offer that’s competitive with the existing ones before the court.
“I believe apart from us, there are two other bids in the fray.”
One of them involves Authentic Brands, which owns Nine West and Aeropostale, in alliance with Saks Fifth Avenue.
A sterling legacy
It was in August that Barneys filed for bankruptcy proceedings with a New York court. The first store opened in 1923 and over the decades it became a veritable signature for luxury shopping in the city. (Among its most notable presence was in the “Sex and City” series and subsequent movie spin-offs.) But recent years have proved infinitely tougher for departments stores, even fabled ones.
But Jackson reckons there is always the possibility for a turnaround of some sort. And he’s putting serious money — $270 million — in that pursuit.
“There are seven locations that are still operating profitably,” he added. “Now, if we win, we will focus on these and add select locations outside of the US.
“Yes, retail sector has gone through turbulence, and that will continue. But there are shoppers — in the US and internationally — who crave authentic luxury experiences. That’s what a Barneys under our guidance can provide.
“Plus, prior to the bankruptcy, Barneys had invested in the technology to offer web-based shopping. We can definitely build on that. There are many ways an institution like Barneys can be restructured even in these market circumstances.”
A key partner
Arabian Oud will also be central to a turnaround strategy, if the bid sails through in the courts. As the name suggests, it has built its base around fragrances, and has consistently been named among the Top 100 brands in the kingdom. Its network now extends to more than 400 outlets.
“Solitaire will build at least two Barneys’ stores initially in the kingdom, and subsequently in other regional cities,” said Jackson.
“Look, there are perceptions in the Middle East that a bankruptcy involves liquidation of a company. In the US, that’s not the case — Barneys is a potential turnaround story with the right strategy. We can offer that.”
Solitaire Partners specialises in alternative investments, with its current portfolio listing a $450 million hotel in Midtown Manhattan, and 300 million pound for a hotel project in Mayfair, London.
Jackson himself is no stranger to the UAE, having overseen a strong of acquisitions for Dubai in his role as CEO of Istithmar World.
As the deadline inches closer to October 31, Jackson is definitely not one to fret about the outcome. “We are definitely hopeful about being part of the winning bid … that’s the whole intention.”