Days after Barneys New York was sold for pieces, the store-closing sales have started. But a warning before you run out the door: it’s a very Barneys kind of sale, at least for now.
You’ll find a $1,690 Chloe bag for a mere 5 percent off. That’s an $85 savings. You could grab an Altuzarra sweater for $625.50, marked down from $695. Or you can wait and play chicken — the luxury retail version — with B. Riley Financial’s Great American Group, the liquidation specialists running the sales.
The discounts, which account for the desirability of each item and its sales history, will initially be minimal. But they should increase during the course of the sale “based on a somewhat mathematical, somewhat artful formula,” said Scott Carpenter, president of retail solutions at Great American Group.
The firm hopes to sell the bulk of merchandise by the end of December but is prepared to run sales into February depending on how it fares. (Competing stores generally begin their holiday sales around Nov. 20, which gives Barneys a two-week lead on pocketbooks.)
Offloading the luxury wares from Barneys’ five full-price stores, two outlets and its websites is a departure from other liquidations that the firm has overseen in recent memory, including Toys ‘R’ Us and Payless Shoe Source.
The $271 million deal for Barneys sold the beleaguered department store in two parts: its intellectual property went to the licensing firm, Authentic Brands Group, while its assets, including reams of designer shoes, tuxedos, coats and more, were purchased by B. Riley.
Authentic Brands, whose plans for the brand include licensing it to Saks Fifth Avenue for shop-in-shops, may operate stores named Barneys in the future. However, Mr. Carpenter said that his firm “will sell every stitch of product” in its current locations, shuttering Barneys as it is known today. As part of an agreement with Authentic Brands, the sales are being referred to as “store closing sales” rather than “going out of business” sales.
Executives at many of the high-end brands stocked at Barneys are holding their breath, hoping the sale is not too disruptive. Some are trying to buy back their merchandise. LVMH Moët Hennessy Louis Vuitton is the only vendor with an agreement that says its goods cannot be discounted, which it struck with Barneys after the retailer filed for bankruptcy in August, Mr. Carpenter said.
He added that LVMH — whose labels include Celine and Givenchy — even has the right to pull its goods entirely, though the luxury goods purveyor has not done that yet. He noted that store closing sales often double store traffic, which can benefit even full-price brands.
When Barneys filed for bankruptcy, its biggest unsecured creditors included The Row, with a $3.7 million claim, Yves Saint Laurent, with a $2.2 million claim, and Balenciaga, with a $2.1 million claim. Others on the list were Celine, Gucci, Prada, Chloe and Azzedine Alaia.
The retail value of all of the company’s merchandise right now is about $500 million, Mr. Carpenter said.
“We’ve been contacted by a number of vendors that want to buy their product back, but we haven’t made any agreements with any of them,” he said.
“We’re open to talking to them but generally speaking, they want to buy their stuff back at a discount — I’d rather sell it to you at a discount,” he said. “Some have indicated they might just go into a store and buy the product if they want to do that.”
Vanessa Friedman contributed reporting.