Money & Company

Tracking the market and economic trends
that shape your finances.

« Previous Post | Money & Company Home | Next Post »

Ron Burkle makes a bid for Barneys

January 29, 2010 |  1:21 pm

Ron Burkle is known for investing in supermarkets, but the Los Angeles business magnate apparently is making moves to go significantly more upscale.


Burkle has made an offer to take a controlling stake in Barneys New York, the storied but troubled luxury retailer, according to the Wall Street Journal. The paper said Burkle offered in December to inject $50 million into the chain in a deal that would give him 80% of the company’s common stock.

In addition to its flagship store on Madison Avenue in New York, Barneys has stores in upscale areas across the country, including Beverly Hills.

A bid would suggest Burkle is confident about a recovery in the luxury fashion market, which has struggled during the economic downturn.

Barneys, which rose from humble origins to the heights of fashion, was acquired in 2007 by the investment arm of the Dubai government, Istithmar World Capital, for nearly $1 billion. The deal involved lots of debt, which has caused problems for the company. Burkle has already bought a significant amount of the debt though his private equity firm Yucaipa Cos. Burkle’s latest offer still would have to pass through a number of hoops.

Barneys, with its glitzy showrooms, may seem a natural fit for Burkle, whose high-flying lifestyle has garnered him friendships with folks in the political and entertainment worlds, including President Bill Clinton and music and fashion entrepreneur Sean "Diddy" Combs. The New York Post dubbed Burkle the “Billionaire Party Boy,” and looking at the pictures of the well-dressed magnate makes one wonder how much he already may have propped up Barneys at the cash register.

-- Nathaniel Popper

Photo: Ron Burkle. Credit: Chester Higgins Jr. / New York Times