Jones Apparel Group confirmed on Thursday that it will purchase Barneys for $400 million, a deal Boneparth, Jones’ chief executive officer, expects to close by the end of the year.
The luxury retailer will remain under the leadership of its ceo, Howard Socol. With the help of Jones’ deep pockets, Socol plans to expand the specialty chain’s fleet of flagships and, next spring, add three Co-op concepts in Costa Mesa, Calif., Chicago and Atlanta.
Barneys may also see more stores overseas. “As Asia gets more and more affluent, there will be more opportunity,” Boneparth said during an conference call with Wall Street analysts. He said that while other parts of retail are fairly mature, Barneys is the exact opposite, “an immature opportunity in the U.S.”
The marriage is a step outside the norm for Jones, known primarily as one of the industry’s leading moderate and better apparel manufacturers, even though it operates roughly 900 stores, many of them specializing in footwear, as a result of its purchase of Nine West in 1999.
Boneparth told analysts that the Barneys high-end business melds wells with the distribution channel for Jones’ existing operations.
“Whether you like it or not, America is getting both poorer and richer at the same time, which is an unfortunate social commentary, but a real fact of life,” he said. “So catering to that growing number of wealth, truly wealthy people, we perceive as a real opportunity for this company.”
In a joint interview with Socol at Barneys’ flagship store on Madison Avenue, Boneparth said, “It’s an aspirational thing to be able to shop at Barneys and that’s not limited to the borders of the United States.”
It is also an avenue of growth that does not challenge any of Jones’ existing businesses. Barneys, with annual sales of $444.2 million, can be built into a $1 billion business, Boneparth said, though he declined to be pinned down to a timeline. Last year, Jones posted revenues of $4.38 billion.