Istithmar World Capital, the investment arm of Dubai World, has given "significant" additional capital to the Barneys of New York retail group, the company announced yesterday. Istithmar says the bail-out is to help the upmarket US chain meet its financial requirements this year. "Working closely with management, we believe that this amount allows [Barneys] financial flexibility," Istithmar said yesterday.
The amount was not disclosed but earlier this month the New York Times claimed that Istithmar planned to put an additional $10 million into the struggling retailer.
The Dubai investment firm bought Barneys from Jones Apparel Group two years ago during the height of the boom, however it has since struggled to expand the retail chain outside the US.
The price paid was not disclosed but was reportedly in the region of $950 million.
In January, it was reported that Istithmar had received calls from potential buyers but was reluctant to sell for less than it had earlier paid.
Set up by Dubai World in 2003, Istithmar said it would continue to monitor Barneys' progress but it was "confident that no further injection is needed at this time".
The bail-out came just after the ratings agency Standard and Poor's cut Barneys rating to a deeply distressed level.
The deal follows recent similar cash injections into iconic western brands.
Last year Abu Dhabi bought Manchester City football club for $225 million, and it paid $800 million for a stake in New York's Chrysler building. Nakheel bought a stake in the Cirque de Soleil circus troupe.
© 7Days 2009
