Japanese firm muscles in on Barneys takeover

Barneys currently has branches in New York City, Beverly Hills, Boston, Dallas, Seattle, Chicago, and Chestnut Hill in Massachusetts, as well as Japan.

Japan's Fast Retailing Company has tabled a "definitive proposal" to acquire luxury fashion retailer Barneys New York from Jones Apparel Group for $900 million, the company said last night.

The move looks set to give Fast Retailing the upper hand on Dubai-owned investment firm Istithmar, which last month agreed to purchase Barneys for $825 million.

Jones Apparel's deal with Istithmar, part of conglomerate Dubai World, allows it to consider superior bids received before July 22. The group received an unsolicited bid from Fast Retailing on July 5.

However, Jones Apparel will have to pay a break-up fee of $22.7 million to Istithmar if it chooses to accept Fast Retailing's offer.

Fast Retailing, which operates the Uniqlo casual clothing retail chain, said in a statement that it is "committed to supporting Barneys' continued growth and unique position as one of the leading luxury department store brands in the world".

The company said its offer is conditioned on execution of a "mutually acceptable purchase agreement," adding that the deal "is not subject to financing and can be consummated on an expedited basis."

Fast Retailing has aggressively expanded its Uniqlo operation overseas in markets such as the UK and Asia, and has ambitions to challenge US clothing company Gap. It opened its global flagship store in New York City's Soho neighbourhood last September.

Barneys currently has branches in New York City, Beverly Hills, Boston, Dallas, Seattle, Chicago, and Chestnut Hill in Massachusetts, with additional stores slated to open in San Francisco and Las Vegas.

The chain also has three Tokyo locations, operated under license by the Sumitomo Corporation.

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