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Wednesday, November 13, 2019

It’s Official: Barneys New York's New Owner Is Authentic Brands Group

The licensing firm’s $271.4 million acquisition of the bankrupt luxury department store has closed, but there are plans to keep a physical footprint.

After a contentious three-month auction process, Authentic Brands Group and B. Riley Financial Inc. are the new owners of Barneys New York, in a deal that will see most of the struggling luxury retailer’s remaining stores close and its name licensed to rival Saks Fifth Avenue.
The licensing company’s $271.4 million sale was approved in a bankruptcy hearing Thursday morning, but the judge left room for a last-minute bidder to offer a deal that allows some portion of the business to remain in operation before the papers are signed.
The closing Friday greenlights the liquidation process for Barneys, with sales beginning soon, according to liquidator Great American Group. The markdowns will take place online and at all five Barneys stores, as well as its warehouse and outlet locations.
Barneys CEO Daniella Vitale stepped down Friday morning, according to an internal letter obtained by BoF.
"Today is my last day with this wonderful organization. As announced earlier on the call Authentic Brands Group will take control of the company today. Transition plans will be shared shortly," she wrote in the memo. "I am deeply sorry for all you have been through in the past year. Please understand that we tried very hard to keep this out of court and to find a solution before filing. We were saddled with many issues long before this began, ones that were unfortunately exacerbated by a difficult macro environment and the loss of the Madison arbitration."
As part of its plan to monetise Barneys’ intellectual property, ABG will close remaining stores and sell off the inventory. In addition to storewide sales, the retailer will offer private sales events to its most loyal customers, according to Great American.
But after the merchandise is gone and ABG wraps up its transition, a new iteration of Barneys will emerge — one with a physical footprint, the company said in its announcement of the sale closing Friday afternoon.
[ABG will] grow Barneys New York’s global presence across retail, including pop-ups, shop-in-shops, e-commerce, and a new freestanding store in a key US market.
"ABG will leverage its international scale, marketing expertise, and network of best-in-class partners to grow Barneys New York’s global presence across retail, including pop-ups, shop-in-shops, e-commerce, and a new freestanding store in a key US market," ABG said in the announcement. "Its initial focus will be on high-fashion collaborations, branded namesake products, and expanding international retail in both brick and mortar and [e-commerce.] There is also a strategy in development for Freds to export this beloved eatery to luxury destinations around the world."
In addition, ABG said it has tapped Saks Fifth Avenue to license the Barneys brand name in North America. This will be in the form of shop-in-shops inside Saks locations. ABG will also change Barneys' Madison Avenue location into a "pop-up retail experience," it said, which will include art installations, boutiques and entertainment.
“We see an incredible opportunity to extend the [Barneys] brand’s equity in current and new markets around the world,” ABG chief executive Jamie Salter said in a statement last week announcing the court approval of the company’s bid.
The bidding continued into Friday morning, 24 hours after ABG’s stalking horse bid was pre-approved for closing in bankruptcy court in Poughkeepsie, N.Y. on Thursday. Barneys’ vendors and employees held out hope that a competing bidder could swoop in and offer a more enticing future for the New York chain — one that entails keeping at least part of the business in operation.
Sam Ben-Avraham, a trade show operator and investor behind Kith, created a widely circulated “Save Barneys” campaign in his efforts to pool together capital from a consortium of retail veterans, including Andrew Rosen, Intermix founder Khajak Keledjian and billionaire investor — and previous Barneys’ stakeholder — Ron Burkle. But ultimately Ben-Avraham bowed out of the process.
“After two months of working around the clock, my team and I had to make the hardest decision we could have imagined: to pull out of the race and not go to court this morning,” he said in an Instagram post on Friday. “Unfortunately, we failed to convince enough people in the business community that it made economic sense to keep Barneys alive.”
David Jackson, the former chief executive of Dubai-based Istithmar World, which controlled the department store from 2007 to 2012, was also in the running to buy Barneys on behalf of the Saudi Arabia-based fragrance company Arabian Oud.
“Haven’t slept since Tuesday,” Jackson said in a text message Thursday afternoon, amid his continued efforts to put together a bid.
Both Jackson and Ben-Avraham presented plans to keep some of the remaining Barneys stores open, starkly contrasting ABG’s liquidation strategy.
“Every New Yorker that likes fashion has a relationship with Barneys,” Ben-Avraham told BoF last month. “There’s still a lot of loyalty from shoppers … We have a very specific plan on how to take it and bring it to the future.”
Barneys filed for Chapter 11 bankruptcy protection in August, after losing a rent dispute with its Madison Avenue flagship landlord, Ben Ashkenazy. The arbitration ruling resulted in a 72 percent hike in rent, from $16.2 million annually to $27.9 million, which went into effect in January.
Barneys has always been very much a fashion-forward niche player that has a good customer base, but the places and availability of product has changed.
The store’s issues ran deeper than real estate. Years of lagging sales thanks to stiff competition from e-commerce upstarts helped push Barneys into the red. It’s not the only retailer to suffer due to shifting consumer behaviour: Lord & Taylor closed a number of stores earlier this year, including its Fifth Avenue flagship, and L Brands shuttered Henri Bendel in September 2018. Some industry voices point to the inevitability of Barneys’ demise based on the challenges facing the traditional multi-brand retail business model.
“Barneys has always been very much a fashion-forward niche player that has a good customer base, but the places and availability of product has changed,” said Steve Sadove, the former CEO and chairman of Saks Fifth Avenue. “You have so many more brands themselves competing against Barneys, and consumers also have access to digital shops like Net-a-Porter.”


Monday, September 30, 2019

Gucci’s First Live-streamed Show on Weibo Draws 16 Million Viewers

Gucci in November will open a new concept store in Beijing and launch its makeup line in China.

GUCCI’S CHINA VIEWS: Some 16 million viewers connected on Weibo to see Gucci’s spring 2020 show, marking the first time the Italian brand had live-streamed its show on the Chinese platform. According to Weibo, views until now, including playback, totaled 22 million and 179,000 viewers posted a live comment. Likes totaled 421,000.

Held in Milan on Sept. 22, the show for the first time was certified carbon neutral, organized according to the ISO 20121 international standard that defines the sustainability of an event by measuring its environmental, social and economic aspects.

Gucci has a number of projects lined up in China. Following the opening on Sept. 16 of a store at the sprawling Plaza 66 shopping mall in Shanghai, the company will open a new special concept store at Shin Kong Place in Beijing on Nov. 6. That month, Gucci will also launch its new makeup line in China. As reported, Gucci sold more than 1 million lipsticks in the first month since the Alessandro Michele-designed line dropped in May. The lipstick line was launched exclusively on on May 4, followed by a roll out in New York and in selective doors worldwide, backed by a major digital push.

Gucci has been upping the ante on its social media platforms. According to Tribe Dynamics, the data firm best known for tracking earned media value, in August, Gucci ranked first out of the top 10 fashion brands, recording more than $26.7 million in earned media value. This was a 2 percent increase over the previous month. Chanel was listed as second in the ranking, reporting more than $23.5 million in earned media value, a 7 percent decrease. Dior ranked third, totaling $21.8 million, down 7 percent, followed by Louis Vuitton, totaling $18 million euros, a 17 percent decrease. Saint Laurent, on the other hand, was up 4 percent, totaling $11.3 million.
Gucci also scaled another list. With its 36.9 million followers on Instagram, it is the number-one fashion brand on that platform, overtaking Chanel, which has a following of 36.8 million. oa here 


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