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Barneys New York Owner Richard Perry seeks to sell stake

By Kristopher Fraser

Jul 7, 2016

Richard Perry, the majority owner of Barneys New York, has retained Goldman Sachs to sell a piece of the luxury retailer. Perry has been unavailable for comment since he made this announcement Wednesday morning, July 6.

It is presumed that the billionaire hedge fund manager would still retain his majority stake in the business. Perry has been the majority owner of the company since 2012 when he purchased the majority of the luxury chain's 600 million dollars in debt in exchange for equity.

Rumors have been swirling as to if CEO Mark Lee would be leaving the company, but Barney has said that Lee will continue on in his role "for the near future." It has been speculated that Lee might leave the company since last winter.

News about Perry retaining Goldman Sachs broke in the New York Post on Wednesday. The report also mentioned Barneys' declining earnings before interests, taxes, and depreciation, and amortization. Barneys has dismissed the reports as false and said they are "outperforming" their competition. Their current growth is being generated by both their website and new stores on 17th Street in Chelsea.

Despite growth, Barneys still has some challenges to face on the brick-and-mortar front. they have been just making it by with favorable rents since they emerged from bankruptcy in 1998 and entered a 20-year lease for their Madison Avenue store in 1999.

The lease is up for renewal in 2019, but the negotiations are rough. Rents are expected to double, with estimates ranging from 30 million to 40 million dollars.

Madison Avenue rents have skyrocketed, but they have softened this year, which might help Barneys in negotiating a reasonable rent price. In the face of a struggling luxury market, Barneys should be cautious about keeping all costs under control.

photo via Barneys website