Los Angeles Investor Becomes Part Owner of Barneys New York

Barneys New York, the venerable high-end retail chain that has gone through a number of owners in recent years, has taken on a distinctive Los Angeles influence.

Billionaire Ron Burkle, whose Yucaipa Cos. investment firm is headquartered on Sunset Boulevard, has joined Perry Capital of New York to take a majority share in the retailer. As a result, Burkle will gain a seat on the board of directors. Richard Perry, head of Perry Capital, will become chairman of the board.

The two financiers take over majority control of Barneys from Istithmar World PJSC, which is controlled by the state-owned Dubai World holding company. Yucaipa sold the debt it owned and used the proceeds to take a minority stake in the company, according to company spokesperson Frank Quintero. The combined $540 million debt-equity swap reduces the debt of Barneys New York from $590 million to $50 million.

But no one was saying what percentage of Barneys is owned by Yucaipa or Perry Capital. And there was no word from Yucaipa Cos. on its future plans to help the ailing retailer regain ground in the luxury market.

Barneys New York was founded in 1923 by Barney Pressman, who sold inexpensive men’s suits. In the 1970s, the retail chain added womenswear. But in later years its merchandise mix proved challenging, and in 1996 the company declared bankruptcy. It exited from bankruptcy protection in 1999 and was bought by Jones Group Inc. Istithmar bought Barneys from Jones Group in 2007 for $942.3 million.

High-fashion stores are having a better time of it than during the recession, when everyone was cutting back purchases. Barneys executives said stores open at least one year have seen their sales rise at a double-digit-percentage rate.

The retail chain operates nine Barneys, with one in Beverly Hills, and 17 Barneys Co-Op stores, designed for a younger market. —Deborah Belgum