Istithmar bags Barneys

With the Barneys deal now secured, Istithmar will turn its attentions to expanding the brand both at home and abroad. (Getty Images)

Dubai-based Istithmar is set to buy Jones Apparel Group's Barneys New York for $942.3 million after Japanese casual-clothing retailer Fast Retailing today pulled out of the bidding war.

The move by Fast Retailing ended a month-long tug-of-war between the Dubai-owned private equity firm and the operator of the Uniqlo stores for ownership of the luxury department store chain.

Jones Apparel said on Wednesday it agreed to sell Barneys to Istithmar, part of state-owned conglomerate Dubai World, but Fast Retailing had until 2100 GMT, to make a new offer.

The selling price more than doubles the $400 million that Jones Apparel paid for the New York fashion retailer in 2004.

Ahead of the announcement, shares in Fast Retailing closed up 10.5% at JY7,190 on expectations that its bid for Barneys would fall through.

Investors had worried that Barneys was overpriced and that it would be difficult to achieve operational synergies between Fast Retailing and the upscale fashion store.

Global expansion

With the Barneys deal now secured, Istithmar will turn its attentions to expanding the brand both at home and abroad.

Chief executive David Jackson has previously said there is a lot of potential for Barneys outside the US, highlighting high growth markets such as China and the Middle East.

Jackson has also hinted that a Barneys opening in Dubai could be on the cards.

“If we are going to expand internationally, Dubai is a location we would consider, absolutely,” he told ArabianBusiness.com last month.

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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