Barneys’ New Chapter to Be Written in Licensing Royalties
With Authentic Brands Group (ABG) emerging as the new owner of Barneys with a $271 million bid in a bankruptcy auction, the storied retail brand will begin a new chapter largely written in licensing royalties rather than merchandise sales.
ABG is closing the chain’s seven remaining stores including the New York flagship. ABG has ambitious plans – it is licensing the brand to Saks Fifth Avenue for opening Barneys shops in 40 stores, is weighing new locations in Greenwich, CT and Boston, MA, and will make the brand more widely available for licensed apparel and other products. It also is planning licensed stores for international markets.
To be sure, ABG has a good track record in reviving retail brands, both for standalone stores and branded merchandise. For example, in partnership with Simon Property Group and General Growth Properties, it purchased Aeropostale in 2016 and has about 500 stores and a licensing deal for bedding. Another acquisition – Juicy Couture – has 150 stores and licensed products, while its Nine West brand has a women’s apparel DTR with Kohl’s.
And there are reasons for optimism about retail brand revivals, where the brands still carry cache with consumers.
ThreeSixtyGroup, which purchased the FAO Schwarz brand, opened a store in Shanghai last May as part of a licensing deal with Kidsland that calls for additional locations, and it recently added an in-store shop at Selfridge’s in London. And that was after it opened a flagship in New York’s Rockefeller Center last fall. It also has a similar store and merchandise plans for its Sharper Image brand.
The sale of Barneys also came during a week in which Simon Property Group CEO David Simon told investors that he believed the on-going spate of retail bankruptcies was “reaching the bottom.”
Some legendary retail brands are still trying to reinvent themselves. The Wall Street Journal this week reported that the parent of still-struggling Sears is exploring the sale if its legacy DieHard brand; it sold the Craftsman brand in 2017 to Stanley Black & Decker.
The struggles at retail continue and we’ll be watching for further changes in the retail brand landscape.