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The majority of those still in the running are financial firms, although it is understood there also are some nonfinancial companies interested. Among the financial firms is J.W. Childs and one industry player is Elie Tahari.
Executives at J.W. Childs did not return calls for comment. Freeman Spogli & Co., another financial company, also made it to the second round of bidding and was keen on Barneys but has now dropped out, financial sources said. Partners at the firm could not be reached for comment. Both J.W. Childs and Freeman Spogli also passed on an investment in Fortunoff, an investment banker said.
As for designer Tahari, he’s still looking for a financial partner. Some merger and acquisition specialists here and in London said that Howard Tillman, the owner of Jaeger, is one possible candidate and that he is in the middle of conducting due diligence. Others close to Barneys’ financial circle say that they’re not aware of any “snooping of the books” by Tillman, however. A spokeswoman for Tillman said he is traveling and could not be reached for comment. Tahari also could not be reached for comment.
Barneys New York was put on the auction block at the end of June by its owners, Whippoorwill Associates and Bay Harbour Management, the two backers that pulled the upscale retailer out from bankruptcy. Peter J. Solomon Co. and Morgan Stanley are the investment advisers to Barneys.
Of the financial buyers that initially stepped up to the plate, six reached the second round of bidding, and Tahari, considered an industry player, was the seventh to move into round two, according to merger and acquisition specialists. Sources said that management presentations were made to the seven potential bidders. How many will actually make a final offer remains to be seen, but investment bankers said as many as three or four “are likely.”
By now, the parties are in their final stages of due diligence. Bidders have already had extensive discussions with their lenders, and with their due diligence nearly done, are preparing letters of commitment for financing, investment sources said.