TOKYO, 7 August 2007 — Japanese casual clothing giant Fast Retailing has raised its bid for US retailer Barneys New York to $950 million in cash, trumping an increased offer from Dubai investment firm Istithmar.
The swift counter-offer from the Japanese group underscores its determination to snare the celebrated New York retailer as it set its sights on becoming a global player in clothing retailing. “Barneys is a really attractive company to us. It’s worth raising our bid,” a spokesman for Fast Retailing said yesterday, confirming its latest offer.
Barneys owner Jones Apparel Group said in a statement late Sunday that its board had backed the increased Fast Retailing offer and informed Istithmar of its intention to accept it.
Unless Istithmar matches Fast Retailing’s offer within two business days, Jones Apparel Group will scrap its existing agreement to sell Barneys to the Dubai private equity firm and pay it a termination fee of $22.7 million.
Fast Retailing, which runs the Uniqlo chain of stores offering affordable clothing, last month offered $900 million for Barneys, topping an earlier 825-million-dollar bid from Istithmar. Istithmar raised the stakes on Sunday by matching the higher offer but Fast Retailing quickly returned to the table with its latest bid for the celebrated New York retailer, which was started in 1923 by Barney Pressman but has had a troubled history including a period of bankruptcy in the 1990s.
Under the Jones group, Barneys operates flagship stores in New York, Beverly Hills, Chicago, Boston and Dallas as well as several regional “warehouse” stores and others under the Barneys Co-Op name.
Fast Retailing is aiming to overtake industry leaders such as Spain’s Zara and Sweden’s Hennes and Mauritz (H and M) to become the world’s number one in casual wear.
Its Uniqlo brand flourished during Japan’s decade-long slump in the 1990s by selling cheap yet good quality clothing, mainly manufactured in China.
The chain has since branched out in China and Britain as well as France.
It is up against a wealthy rival bidder.
Istithmar is owned by Dubai World, a conglomerate which is in turn owned by the government of the Gulf emirate of Dubai, one of the seven members of the oil-rich United Arab Emirates. Its bid for Barneys follows a series of investments in the United States including a deal last year to buy the Loehmann of New York chain of shops which had gone bankrupt seven years earlier.