Barneys New York Reaches Agreement To Reduce Debt By More Than $500 Million
Significantly Increases Financial Flexibility to Accelerate Investment in the Business Across All Channels
Benefits Customers, Vendors and Employees
NEW YORK, May 7, 2012 /PRNewswire/ -- Barneys New York ("Barneys" or "the Company"), the luxury specialty retailer, announced today that it has reached an agreement with the Company's largest lender, Perry Capital, its sponsor, Istithmar World, and certain of its other lenders to significantly reduce the Company's debt and improve its capital structure. The transaction provides the Company with significant financial flexibility to prioritize its investment in its operations and grow the business. As part of the agreement, Perry Capital and The Yucaipa Companies have partnered to convert debt for equity in order to reduce Barneys' long-term debt from $590 million to $50 million. As a result, Perry Capital has become the majority owner of Barneys New York.
"This is an exciting moment in the history of Barneys New York," said Barneys Chief Executive Officer, Mark Lee. "We are extremely pleased to have reached an agreement with our partners that will significantly reduce our debt and provide the Company with the funding to accelerate the execution of our successful business strategy. This agreement provides us with increased free cash flow that will be used to revitalize our stores, invest in Barneys.com and further enhance our customer experience at a time when our operational financial performance is very strong. Our customers, vendors and employees will benefit from this significant deleveraging which will reinforce Barneys' unique position as the preeminent luxury specialty retailer."
Barneys New York reported double-digit comparable sales growth and a 40 percent increase in annual EBITDA for the full year 2011 compared to 2010.
"Barneys New York is an extraordinary brand that will become even stronger through this transaction," said Richard Perry, CEO of Perry Capital. "We are confident that the new capital structure will provide the Barneys management team with the financial flexibility it needs to continue its already impressive performance. Perry Capital, Yucaipa, Istithmar World and Barneys' management team have worked together closely and cooperatively. Barneys New York is now extremely well positioned for the future."
About Barneys New York
BARNEYS NEW YORK (Barneys) is a luxury specialty retailer with flagship stores in New York City, Beverly Hills, Chicago, Seattle, Boston, Dallas, San Francisco, Las Vegas, and Scottsdale. The Company also operates a highly successful online business at Barneys.com. Founded as a men's retailer in 1923 in downtown Manhattan it turned into an international arbiter of high style for both women and men in the 1970s and became renowned for discovering and developing new and innovative design talent. Barneys is famous for selling the most intriguing edit from the world's top designers including women's and men's ready-to-wear, accessories, shoes, jewelry, cosmetics, fragrances, and gifts for the home. Barneys' signature sense of wit and style is manifested in its creative advertising campaigns, original holiday themes, and celebrated window displays. Barneys' innovative CO-OP, a mecca for young and emerging designers, was launched in 1985 and has since expanded into a freestanding store concept. Barneys operates more than a dozen CO-OP stores in eight states across the U.S. For more information about Barneys New York please visit www.Barneys.com.
Forward Looking Statements
This press release contains "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements are those that do not relate solely to historical fact. They include, but are not limited to, any statement that may predict, forecast, indicate or imply future results, performance, achievements or events. Words such as, but not limited to, "will," "intend," "expect," "would," "could," "must," "may," and similar expressions or phrases identify forward-looking statements.
Factors that may cause expected results or anticipated events or circumstances discussed in this press release to not occur or to differ from expected results include our ability to maintain adequate liquidity to operate our business and our ability to make interest payments on our outstanding indebtedness. All forward-looking statements involve risk and uncertainties. In light of these risks and uncertainties, expected results or other anticipated events or circumstances discussed in this press release might not occur. The forward-looking statements included in the press release are made only as of the date they are made and the company undertakes no obligation to update any such statements, except as otherwise required by applicable law. There can be no assurance that actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences.
SOURCE Barneys New York