Apr 15, 2009
Barneys gets cash lifeline from Dubai owner
Apr 15, 2009
NEW YORK, April 14 (Reuters) - The Dubai investment vehicle that owns Barneys New York Inc threw the high-end retailer a lifeline on Tuesday 14 April that will allow it to pay for its shipments for the rest of the year.
Barneys Co-operative at Barneys, New York
The capital injection came a day after ratings agency Standard & Poor's cut Barneys to a deeply distressed level and warned that vendors may tighten terms or limit shipments.
Istithmar World Capital, owned by the Dubai government, said in a statement on Tuesday that it had provided "a significant level of additional capital to support Barneys New York", but it did not specify the amount. A spokeswoman was not immediately available to comment.
Earlier this month, the New York Post reported that Istithmar planned to inject at least $10 million into the retailer, which would allow it to pay down its revolving credit facility and free up cash to help it ride out the recession.
The luxury retailer, with stores in New York, Beverly Hills, Chicago, Boston, Dallas, San Francisco and Las Vegas, caters to wealthy clients.
In addition, the company operates two regional stores, 18 Barneys New York CO-OP stores, and 13 outlet stores, and employs 2,200 people.
"We will continue to monitor the company's performance but we are confident that no further injection is needed at this time," David Jackson, chief executive of Istithmar World Capital, said in the statement.
Istithmar bought Barneys for $942 million from Jones Apparel Group Inc (JNY.N) in 2007, when luxury retailers were ringing in hefty sales. But the financial crisis has wiped out much of that demand, hurting other high-end chains like Saks Inc (SKS.N) and Nordstrom Inc (JWN.N).
Saks saw sales at stores open at least a year fall 23.6 percent in March, while Nordstrom's same-store sales fell 13.5 percent. (Reporting by Martinne Geller; Editing by Andre Grenon, Toni Reinhold)
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