“The senior-level management group, excluding me, has an average of 13 years at the company, or a total of over 100 years experience living and breathing Barneys,” he said. “We are all looking forward to making Barneys the best it can possibly be and are incredibly motivated by this.”
Socol declined to divulge the terms of his new employment pact, but said that he has a “long-term” agreement to stay at the helm of Barneys. One immediate change for him is that he has already tendered his resignation of his board seat at Liz Claiborne Inc., a Jones competitor.
The Jones-Barneys deal includes cash consideration of $19 per share to Barneys’ stockholders totaling $294.3 million. Jones also will fund the repurchase of Barneys’ outstanding senior secured notes due 2008, with a face value of $106 million, through a tender offer that will be executed by Barneys.
While some analysts voiced skepticism about the deal, investors shrugged at the news, sending shares of Jones down $1.06, or 2.9 percent, to close at $34.92.
“The risk-reward on this was very, very attractive,” Boneparth said. “This is not a bet-the-company event.”
Still, Barneys was not a bet the apparel giant had initially planned.
“We weren’t frankly looking for Barneys until Barneys came along and then it started to really gel in our minds,” Boneparth said.
“They saw a very pretty girl and they wanted to date us,” Socol added.
Boneparth, trying to assuage fears that Jones was getting into the unfamiliar territory of luxury accessories and designer apparel, said Barneys would be allowed to continue its course with the benefits of Jones’ financial muscle and logistical expertise.
“We simply won’t Jones-ize Barneys,” he said. “When everybody takes a deep breath, they’ll realize that if we were to do that we shouldn’t have bought Barneys. It is very safe to say that anything we sell today will not be in Barneys in the future.”