BARNEYS ON BLOCK
Perry shopping a stake in ailing retailer: source
There’s a huge sale going on at Barneys New York — a minority stake in the glamorous retailer is up for grabs, The Post has learned.
Billionaire hedge fund manager Richard Perry, who took a majority stake in the upscale fashion business in 2012, is shopping a minority slice in the 93-year-old chain, according to a source familiar with the situation.
Perry has hired Goldman Sachs to scout out a buyer, the source said.
“The existing owners don’t want to put more money into Barneys,” said the source, who added that first-quarter, double-digit declines in samestore sales and profits helped cement that outlook.
First-quarter, same-store sales dipped 10 percent from last year, according to numbers being shown to prospective buyers, the source said. Earnings before interest, taxes, depreciation and amortization, or Ebitda, fell 30 percent, the source noted.
In addition, Barneys Chief Executive Mark Lee, who came to the high-profile business six years ago from Gucci, is said to be looking to exit and hand over the reins of the 25store chain to Chief Operating Officer Daniella Vitale, several sources said. Lee and Vitale worked together at Gucci.
A Barneys spokesperson said the company does not comment on rumors.
Perry, who serves as chairman, owns the company along with billionaire Ron Burkle’s Yucaipa Cos.
He took control of Barneys after its previous owners couldn’t continue under a $590 million mountain of debt.
In a debt-for-equity swap, Barneys’ debt was reduced to a much more manageable $50 million.
From the start, Perry and his wife Lisa were committed to running the chain. Lisa, a fashion designer, sells her line in Barneys, including dresses for as much as $795 — plus tops, jackets and home decor.
One financial issue that could be weighing on Perry is Barneys’ lease at its flagship store on Madison Avenue.
The renewal options for the lease come due in early 2019, when real estate sources say the rent will likely go up significantly. “They should be in negotiations [with their landlord] already,” said Faith Hope Consolo, chair of Douglas Elliman Real Estate.
Lee brought many changes to the chain, which fell on hard times after the 2008 recession. He closed underperforming stores and increased revenue.
In November 2014, Lee told Vogue magazine the company was performing “extremely well” and was “debt free, thanks to the vision and support of Richard Perry.”
That was then. Of late, the retail landscape has turned upside down.
“The business of selling other people’s branded products is a challenged business,” said Richard Kestenbaum, a partner in Triangle Capital. “It requires investment, and it’s not surprising that Barneys needs capital for strategic alternatives.”
While some sources said Barneys has pulled back on its purchasing, Gary Wassner, chief executive of Hilldun Corp., a lender, said Barneys has increased its orders through his company.
“They are probably dropping collections that have had weak sell-through,” Wassner said.