Barneys bought in $400m deal
Jones Apparel to acquire upmarket New York store group
Luxury retailer Barneys, made famous by frequent namechecks in the TV series Sex and the City, has been acquired by midmarket US fashion brand owner and retailer Jones Apparel.
The two companies have signed what they described a merger agreement, which will see Jones pay $19 for each Barneys share at a cost of around $294m, as well as take on around $106m in debt, to bring the total value of the deal to $400m.
Barneys, which sells men and women’s fashions, accessories, cosmetics and home furnishings, operates stores in 21 locations, incluidng flagship stores in New York City, Beverly Hills and Chicago and the expanding Barneys Co-op chain. The business generated sales of $444.2m in the year to the end of July.
The Barneys management team led by Howard Socol, chairman and chief executive will stay with the business.
Peter Boneparth, president and chief executive of Jones Apparel, said: “Barneys is a preeminent luxury retailer with great brand awareness. We are excited about bringing this famous brand into our portfolio.
“Our growth strategy has focused on diversification to provide a well-balanced portfolio of businesses. We have worked extensively on building a product mix that provides core competencies in apparel, footwear, handbags, jewelry, denim and retail. We also sell to a more expansive demographic in terms of disposable income, preferred shopping channel, and fashion consciousness.
“Barneys provides the next level of diversification to this mix by introducing a new competency in luxury specialty retailing. With an inherent diversified portfolio comprised of its own brand, as well as numerous other brands from new designers and classic design houses, Barneys provides entry into the high-growth, resilient luxury goods market.”
He added “Barney’s provides an excellent complement to our existing businesses. Howard and his team will continue to operate Barneys as a standalone concept in order to maintain the cache of the business.”
Wesley Card, chief operating and financial officer of Jones, said, “The financial dynamics of the Barneys business and this transaction are also very compelling. We believe Barneys’ operating margins can be increased over time, as expansion provides increased scale.”
Howard Socol said, “Today marks an exciting milestone for Barneys. We intend to continue to cater to our loyal and growing customer base. The Barneys shopping experience showcases a unique mix of merchandise in distinctive and tastefully designed stores, providing an atmosphere of luxury and style.
He added: “We are particularly excited to have identified future sites for expansion of our flagship stores. In addition, new locations are being reviewed for the continued roll-out of our Co-op concept, beyond the Spring 2005 planned Co-opP store openings in Chicago, Costa Mesa, California and Atlanta, Georgia. We see tremendous opportunity as we continue to build upon our success as part of Jones Apparel Group.”
Jones designs and markets a wide range of brands including Jones New York, Gloria Vanderbilt, and Nine West, and also markets licensed apparel rangs under then Polo Jeans Company brand and costume jewellery under the Tommy Hilfiger brand.
