Dubai's Istithmar World is working to improve Barneys New York's financial situation and is committed to the retailer despite tough market conditions, the Dubai-based group said on September 1.
-- Istithmar says "committed" to Barneys, works on fin plan
-- Declines comment on debt restructuring
Barneys is seeking a debt restructuring or bankruptcy filing, which may lead to owner Istithmar losing control over the retailer, media reports had said.
"Istithmar remains fully committed to Barneys and supportive of its management team," the Dubai-based firm said in an e-mailed statement.
"These are challenging times for retailers, and the company continues to work aggressively to improve its financial position." The firm declined to respond to any further questions.
Istithmar is one of the flagship companies of state-owned Dubai World, whose real estate unit Nakheel is struggling to refinance a $3.52 billion Islamic bond maturing in December.
Istithmar in August hired an advisory firm to help it mull options to shore up the luxury chain's financial position. Bloomberg News, citing people familiar with the matter, reported on Tuesday that hedge fund Perry Capital LLC had been approached by Holt Renfrew, the Toronto-based department-store chain, about a joint offer for control of Barneys.
Barneys, with stores in locations including New York, Chicago and Beverly Hills, has struggled in the recession as wealthy consumers have cut back on spending. Istithmar, which bought Barneys for $942 million from Jones Apparel Group Inc in 2007, threw the ailing chain a capital lifeline in April, allowing it to pay for its shipments for the rest of the year.
Parent company Dubai World is under the spotlight, having been hit hard by the global financial crisis with Nakheel alone cutting around 900 jobs since the downturn began, in addition to putting projects on hold, including a one-kilometre (3,281-foot) tall tower in Dubai.
Nakheel sold the last of its stake in Australian developer Mirvac Group last week for $167.6 million, despite saying in 2008 it planned to raise its stake. Dubai World has $59 billion of liabilities, a large proportion of the Gulf emirate's total debt.
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