Istithmar takes Barneys for $942m(2)

Dubai-based private equity firm Istithmar has emerged with high-end retailer Barneys New York for a purchase price of $942m, after a month-long bidding war with Japanese clothing retailer Fast Retailing.

The Jones Apparel Group has agreed to sell its luxury department store chain, Barneys New York, to Dubai-based Istithmar for $942.3 million (€688.1 million). Istithmar acquired the chain after a month-long bidding war with Japanese retailer Fast Retailing.

Istithmar’s $942.3-million final bid is more than twice the amount Jones Apparel paid for the chain in 2004. Istithmar, the private equity investment arm of the Dubai government, initially bid $825 million for the retailer in June.

“This investment will further our continued focus on the retail sector,” David Jackson, chief executive officer of Istithmar, said in a June statement. “We believe that we will be able to accelerate the growth of Barneys’ business by leveraging our experience in the sector and other investments worldwide.”
Private interests have increasingly targeted retailers. Last month, fashion trade Women’s Wear Daily revealed that private equity firm Kohlberg Kravis Roberts was looking to buy Cincinnati-based retailer Macy’s—which reportedly owns 54 percent of its real estate—for $24 billion.

KKR also completed the $7.3-billion acquisition of discount retail chain Dollar General earlier this year and closed on a $7.1-billion deal in July with private equity firm Clayton, Dublier & Rice to acquire US Foodservice from global food retailer Royal Ahold.

Fast Retailing, which currently owns more than 700 stores in Japan, is planning to invest as much as ¥400 billion ($3.4 billion; €2.5 billion) over the next three years on acquisitions. The retailer opened its first flagship store in New York last year, under the Uniqlo brand, and is reportedly pursuing interests in China. It is also reportedly looking to acquire a European clothing brand.