Following Barneys Sale, Ashkenazy Strikes Temporary Deal at 660 Madison
The retailer’s new owner stated it would turn the shop into a pop-up experience.
By Nicholas Rizzi November 1, 2019 3:48 pmreprints
Ashkenazy Acquisition Corporation, the owner of the retail portion of 660 Madison Avenue, has reached a short-term deal to keep a scaled-down Barneys New York open at the property. The announcement comes in the wake of news that the storied retailer has been sold to Authentic Brands Group.
“We have come to terms with Authentic Brands Group, Barneys’ new owner, to keep the Madison Avenue store open in a smaller footprint for the next 12 months while we continue to explore longer-term solutions,” Daniel Levy, a president at Ashkenazy, said in a statement. “Fred’s will remain open as well,” he said, referring to the store’s ninth-floor restaurant.
Authentic Brands said that it would turn the Madison Avenue storefront into a “pop-up retail experience,” according to a company statement today. The pop-up would bring “together an eclectic curation of boutiques, art and cultural installations and exhibits, and entertainment that fosters creativity and community.”
A spokeswoman for Ashkenazy did not immediately provide details about how much of the 264,498-square-foot space Barneys will continue to operate or details about its rent.
“We are extremely disappointed by the outcome of today’s proceedings,” Levy said. “We worked tirelessly with potential buyers and operators to preserve Barneys operations at our properties.” Ashkenazy also houses one of the retailer’s locations at 9570 Wilshire Boulevard in Beverly Hills, Calif.
The storied department store Barneys was officially sold to Authentic Brands and B. Riley for $271 million in a deal approved yesterday and finalized this afternoon. Authentic Brands, which owns more than 50 companies including Nine West and Nautica, will take control of the intellectual property of Barneys and like close the majority of its seven stores around the country.
Under the deal, Authentic Brands will license Barneys name to competitor Saks Fifth Avenue which will run its websites, pop-ups under the Barneys New York at Saks name and “reboot” Barneys at Saks on the fifth-floor of its 611 Fifth Avenue flagship, according to Authentic Brands.
“Barneys is one of the most recognizable and iconic names in luxury lifestyle, and we see an incredible opportunity to extend the brand’s equity in current and new markets around the world,” Jamie Salter, the CEO of Authentic Brands, said in a statement before the deal was finalized. “We are also excited to join forces with Saks Fifth Avenue, the preeminent luxury retailer that continues to bring innovation and fashion authority to the industry.”
In August, Barneys filed for bankruptcy with more than $100 million in debt and announced plans to close 15 storefronts around the country, including its Brooklyn outpost at 194 Atlantic Avenue. Aside from the struggling retail climate, Barneys laid part of the blame on the huge rent hike it faced at its 264,498-square-foot flagship at 660 Madison Avenue, which jumped from $16 million a year to $30 million.
Barneys’ logged about one-third of its sales from the Madison Avenue location so dug in its heels when Ashkenazy recently wanted to raise its rent to $60 million. The retailer started an arbitration process last year arguing its rent should stay the same because of the retail climate, but a judge ruled in August 2018 that Ashkenazy could raise it to $30 million, the New York Post reported.
The retailer’s sale to Authentic Brands effectively marks the end of Barneys nearly 100-year history as a brick-and-mortar retailer. It was founded in 1923 as a 500-square-foot men’s discount store at 117 Seventh Avenue and became famous in the 1930s for its radio and television ads, Business Insider reported.
Kith investor and trade show creator Sam Ben-Avraham got a group of investors to assemble a bid to rival Authentic Brands’ offer that would maintain the storefronts, but he later told Barneys he would not submit a final bid, according to the Post.