Dubai is on a major shopping spree — first the QE2 and now Barneys. Next thing we know, they’ll be buying Microsoft!! (Although, Jones Apparel, Barneys current owners, can still accept a higher bid until July 22 before this deal is completed.)
Barneys New York, the 84-year-old luxury department store chain famous for its clever window displays and cutting-edge designer goods, was sold for $825 million on Friday, June 22, to Istithmar, a private equity and alternative investment house established three years ago and is owned by the government of Dubai.
Jones Apparel Group bought Barneys in 2004 for $397.3 million. (So not a bad return on their initial investment!) They subsequently opened new flagship stores in Dallas and Boston with a Seattle store opening this week and a San Francisco store scheduled to open September 2007.
“This transaction further enhances our ability to develop our brand and grow our business,” said Howard Socol, president and CEO of Barneys in a statement. “Working with Istithmar, we look forward to continued expansion of our flagship, CO-OP and outlet concepts to help us realize the considerable untapped potential of the Barneys brand.”
With the sale of Barneys to an international investor such as Istithmar – they have spent in excess of $1.6 billion of capital towards over 30 companies in the three years since its inception – expansion to Europe and the Middle East seems a likely next step.
Founded in 1923, Barneys started as a small discount men’s store on 17th Street in New York City.
By Vagablond’s Token Redhead.