Perry Capital Takes Over Barneys New York in Debt Swap

Monday, 07 May 2012 05:00 PM

 

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Barneys New York has been taken over by Perry Capital in a debt-for-equity swap that reduces the retailer’s debt by $540 million.

Perry, which takes over majority control from Istithmar World PJSC, partnered with billionaire Ron Burkle’s Yucaipa Cos. investment firm in the conversion, the New York-based company said Monday in an e-mailed statement. The transaction will reduce Barneys’s debt to $50 million from $590 million.

Istithmar, controlled by the state-owned Dubai World holding company, bought Barneys for $942.3 million in 2007 from Jones Group Inc., just before the recession caused declining sales at luxury retailers. Barneys said in its statement Monday that its operations have improved, with sales at stores open at least a year increasing at a double-digit percentage rate and earnings before interest, taxes, depreciation and amortization jumping 40 percent.

Barneys hired Chief Executive Officer Mark Lee, 48, in 2010 to become the first CEO since Howard Socol resigned in 2008. Lee previously ran luxury brands Gucci and Yves Saint Laurent, where he was credited with adding new retail outlets and increasing sales.

Founded by Barney Pressman as a cut-rate men’s suit store in 1923, the company began building up women’s lines in the 1970s. It exited bankruptcy protection in 1999 and was bought by Jones for $294.3 million in 2004.

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