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Liquidity Fears Prompt Delay in Spring Deliveries at Barneys

by Terri Potratz | February 24, 2009 at 03:09 pm

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While retailers and boutiques prepare to launch new spring collections within their retail spaces, Barneys New York is coming up a bit short as numerous accounts are withholding product until the department store comes clean regarding its liquidity and plans for the future.

Barneys was sold to the investment group Istithmar (a branch within DubaiWorld) two years ago at a price tag of $942 million, though the Dubai-based firm has reportedly tried (to no avail) to sell Barneys for half that amount in recent months.

Hilldun Corporation, a top factoring firm, has suspended its accounts with Barneys for at least a week. Another factoring company, Rosenthal & Rosenthal Inc., is also said to have put Barney’s spring products on hold.

A Hilldun executive said the decision was made because Barneys has not been forthcoming enough about its liquidity and its strategy for the future.

Istithmar is not communicating with factoring firms, who are now attempting to force answers out by withholding stock. "That's the only way to get Istithmar's attention," according to Net Worth Solutions president Jack Hendler.

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Roy C

at 23:33 on February 24th, 2009

A more important story than it might seem to some because this is a story of epidemic proportions, and for Barney's to have such a problem is a shock.