Another Bidder Throws Hat in the Ring for Barneys

Jones Apparel Group Inc. (JNY) said Thursday it received an unsolicited bid from Fast Retailing Co. Ltd. to acquire Barneys New York Inc. for $900 million, which tops Jones' existing pact to sell the upscale clothing chain for $825 million.

Jones said it will provide financial information and enter negotiations with Fast Retailing, a Japanese clothing company. Jones' agreement to sell Barneys to Dubai-owned private equity firm Istithmar remains in effect, however.

Jones, which owns clothing, shoes and accessories brands such as Nine West, Gloria Vanderbilt and Jones New York, put itself up for sale last year but failed to find a buyer. It agreed to sell Barneys in June after several months of negotiations.

Under the agreement with Istithmar, Jones Apparel can weigh other offers made for Barneys by July 22, and it can explore bids for the whole company through Aug. 11.

Istithmar, the private equity arm of the Dubai government, was not immediately available for comment on the Fast Retailing offer.

Fast Retailing, which opened its first UNIQLO clothing store in New York City last year, said it told Jones last fall that it was interested in acquiring Barneys.

"The company is pleased that Jones' board of directors has concluded that Fast Retailing's proposal is reasonably likely to lead to a superior offer for Barneys," Fast Retailing said in a statement.

It said owning Barneys would boost its revenue and increase its geographic and market diversification. Fast Retailing has 1,800 specialty stores in more than 12 countries.

Jones agreed to buy Barneys in 2004 for $400 million, marking a departure into luxury retailing for a company that supplies clothes and shoes that fill the racks of mall department stores and discounters.

The Barneys buy allowed Jones to benefit from the faster-growing luxury market and lessened its dependence on selling its wholesale lines to department stores, analysts said.

Jones would have to pay Istithmar a $20.6 million breakup fee if it terminated their agreement, which was announced last month, or $22.7 million if it terminated the deal after July 22.