For decades, Barneys New York epitomized a certain kind of aspirational Manhattan cool.
It matched the city’s soaring skyscrapers in its ambition, unapologetic ego and raised-eyebrow gloss. The retailer was the first to introduce names such as Armani, Alaia, Comme des Garcons, Louboutin and Zegna, and its flagship store on 61st Street and Madison Avenue attracted as many gawkers as shoppers.
On Friday, however, Barneys found itself felled by bankruptcy, sold for parts from a courthouse in Poughkeepsie, N.Y.
Authentic Brands Group will take control of the Barneys name — one that has been part of the Manhattan landscape since 1923 — and license it to other companies like Saks Fifth Avenue. The firm B. Riley Financial is preparing to liquidate Barneys’ high-end wares, at its five stores and two Warehouse locations, starting with private sale events for Barneys’ “most loyal” shoppers next week.
In announcing its acquisition, Authentic Brands said it was “building a business model that will adapt this legendary brand for the future of experiential luxury.”
The retailer’s Madison Avenue store will be turned into an as-yet unnamed “pop-up retail experience,” which will feature four floors of boutiques, art and cultural installations and “entertainment that fosters creativity and community,” the company added.
Authentic Brands also said that it had cut a deal with Saks that would introduce Barneys “shop-in-shops” at Saks stores in the United States and in Canada. Customers will be able to see the unusual pairing of rivals at Saks’ New York flagship store, where a new version of Barneys New York will roll out on the fifth floor.
Barneys filed for bankruptcy in August. Until the last minute, even after the sale was approved, the chain’s management held out hope for another buyer to emerge. But despite a series of late-night meetings and last-minute alliances, one did not appear.
Retail watchers will probably be arguing for years over what, or who, was to blame for the disappearance of what was once a cultural landmark.
“Barneys to New York is like Macy’s: it’s more than just a department store; it’s part of the culture of New York City,” Robert Feinstein, a lawyer representing Barney’s unsecured creditors, said in bankruptcy court on Thursday. “They have the Warehouse there, they have their wonderful windows at the holidays on Madison Avenue. We’re going to lose all of that today, and I think with a little more time we might have preserved it.”
The disappearance of Barneys adds to the broader shake-up in Manhattan retail of the past few years, highlighted by the loss of stores that were once considered institutions and ambitious new projects from out-of-towners. Lord & Taylor closed its flagship in January after selling the building to WeWork. Nordstrom, after years of planning, opened a seven-floor store near Columbus Circle last month, not long after Neiman Marcus opened its first store in the city.
Barneys was founded by Barney Pressman as a cut-price men’s retailer, but over three generations of family ownership it evolved into an elite and expensive purveyor of New York style. It ran into trouble, however, and declared bankruptcy in 1996. It changed hands several times after that, which some said watered down its identity. In 2010, a renovation made Barneys look just like its rivals, as fish tanks and mosaics were swapped out for generic marble. Richard Perry, the former hedge fund manager, took over as the retailer’s owner and chairman in 2012, but remained hands off. He did not appear in court during the bankruptcy proceedings.
Barneys also struggled with the move to online retail, perhaps too obsessed with the mystique of its own influence to understand influencer culture. That became more of an issue as the rents on its stores soared, thanks to deals agreed to in the early part of the century.
The real answer to what caused Barneys’ ills is probably a combination of all of the above. But what is certain is that Barneys fought to the end in an attempt to keep its stores open.
Daniella Vitale, the chief executive of Barneys, spent much of the summer meeting with potential purchasers. Gene Pressman, the member of the Barneys founding family who had driven the store’s expansion into women’s wear and masterminded the opening of its Madison Avenue location in 1993, considered jumping back into the fray “for about five minutes,” he said. He opted out because of the real estate issue.
By the middle of October, for all of Barneys’ efforts since filing for bankruptcy, it had attracted only a single qualified bid: Authentic Brands and B. Riley. Authentic Brands is known for buying the intellectual property of flailing retailers, then turning a profit by licensing their names to other companies for new products and earning royalties from those sales, typically without the bother of rent, store staff and inventory. B. Riley has an expertise in liquidations.
To Barneys loyalists, this was akin to sacrilege. The bankruptcy of an icon was one thing; trading on the Barneys name while plundering its infrastructure and soul was another. A “Save Barneys” movement, complete with an impassioned Instagram account, started with employee support, and Barneys and its lawyers desperately sought other bidders who might be willing to keep at least some of the chain intact.
The most vocal contender was Sam Ben-Avraham, an investor in the streetwear brand Kith and founder of a number of trade shows, who viewed Barneys as a New York landmark that could be reconceived as a new kind of shopping destination.
Just a week before the sale, Mr. Ben-Avraham was still insisting that his offer was on the way, even though the bid deadline had passed; a planned auction was canceled and a statement was released by Authentic Brands and Saks, saying that they had triumphed. It was “not over,” he said.
Days later, David Jackson, chairman of Solitaire Partners and former chief executive of Istithmar World, the Dubai-based group that owned Barneys until 2012, said that he was also planning to bid. On Wednesday evening, Mr. Ben-Avraham was close to announcing that he was backing out — and then changed his mind on Thursday morning.
That set the stage for a suspenseful hearing on a drizzling Halloween afternoon, as the bankruptcy judge, Cecelia G. Morris, prepared to approve the bid from B. Riley and Authentic Brands.
Joshua Sussberg, a lawyer representing Barneys, opened the proceedings with the news that it had not yet found an alternative. Still, it was their fiduciary duty to maximize the value of the company, Mr. Sussberg said, which meant “keeping jobs and stores open, viable, available for employees, for landlords, for trade vendors.” Barneys employs about 2,300 people, 2,100 of them full-time. And so, he said, if a “higher and/or better” offer came in before 10 a.m. on Friday, he would be making a phone call to the judge.
The judge, in her light Southern drawl, offered the use of six empty conference rooms at the courthouse to help speed along potential negotiations with Mr. Ben-Avraham, Mr. Jackson or others. Richard Chesley, a lawyer for Authentic Brands, was incredulous at Barneys’ refusal to face the reality that they had no alternatives, noting that his client had “abided by the rules from the beginning of this process.”
“We’re not here wearing a black hat at all,” Mr. Chesley said. “This process has been fair, it has been open, it has been reported on and people have been working on this day and night, but the process has to end. It has to end by the rules.”
After no competing bid materialized on Friday, it did.
“I apologize if I have failed anyone, and given anyone false hope by not being able to close the deal,” Mr. Ben-Avraham wrote in an Instagram post, thanking his team who, he said, had not slept for two months. “The stores may be gone but the spirit will live forever.” The “Save Barneys” account he posted from had changed its name to “The Spirit of Barney.”
B. Riley will liquidate stores through its Great American Group unit and an outside firm. In a statement Friday, the liquidator said shoppers could also participate on Barneys’ website, but it did not specify how long the sales would continue. It will honor gift cards until Nov 7.
Ms. Vitale resigned as C.E.O. of Barneys on Friday.
“While there are things I might have done differently,” she wrote in a letter to Barneys employees, “I don’t believe it would have changed the end result.”
As store closing sales proceed, the formerly proud Madison Avenue flagship, which has recently felt empty, may once again be briefly full of shoppers. This time, they will be searching for bargains on cut-price Prada bags, Jil Sander shirts and Thom Browne suits before the holidays.
“In the end, it’s tragic,” said Julie Gilhart, president of Tomorrow Consulting, who was fashion director of Barneys from 1992 to 2010. “If ever there was a time for a store that leads through fashion and new ideas from a creative artistic, irreverent lens, it’s now.”
