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Barneys a Done Deal? Jones Apparel Said To Be Surprise 11th-Hour Buyer

It was down to the wire in the race to buy Barneys New York, and the buyer appears to be Jones Apparel Group.

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Howard Socol

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The late Fred Pressman.

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Peter Boneparth

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NEW YORK — The bidding for Barneys New York was heading down to the wire late Wednesday, and the winner appears to be Jones Apparel Group.

Sources said that the apparel giant had emerged as the successful bidder. A final price was not divulged.

Last week, WWD reported that an apparel maker had entered the bidding late in the process and listed Jones among the contenders. Neither Jones nor Peter J. Solomon, Barneys’ financial adviser, would comment late Wednesday.

The price tag on Barneys had been around $400 million, which is in the ballpark of a recent Jones’ acquisition; the supplier picked up Maxwell Shoe Co. in June for $345.5 million. It’s also consistent with Jones chief executive officer Peter Boneparth’s strategy of expanding the company through acquisitions.

From a financial perspective, Jones has enough cash to make the buy. In its most recent quarter, the supplier cut its long-term debt-to-sales ratio to 17.5 percent from 67.2 percent in the prior year. Lenders prefer companies to be leveraged with a ratio of no more than 50 percent. Jones also has about $45.9 million in cash and cash equivalents on its balance sheet.

Barneys was put up for sale on June 30 by Whippoorwill Associates Inc. and Bay Harbour Management, the two investors who bailed out the firm from bankruptcy in 1999. Barneys filed its Chapter 11 petition for bankruptcy court protection in January 1996. A sale represents an exit strategy for the financial firms.

Industry sources began speculating on which retailer or financial buyer would enter the bidding for the upscale retailer. Designer Elie Tahari made a bold move last month, entering the contest and making it to the second round of bidding. Contenders that have made final bids include financial and strategic players. In addition to Tahari, Nelson Peltz of Triarc Co. Inc. reportedly made a play for Barneys in conjunction with Bear Stearns’ Merchant Banking Group.

Although Jones is a surprise winner for Barneys, the company is familiar with several of the key players. Whippoorwill was a creditor in the Kasper A.S.L. bankruptcy. Kasper owns the Kasper and Anne Klein trademarks. The investment firm found a buyer for Kasper last year — Jones Apparel — to the tune of $232.5 million.
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