Will anyone listen to new controller?
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The billionaire's investment arm will hold a 20 percent stake in the high-end fashion retailer as part of a debt restructuring. A hedge fund, Perry Capital, will own 70 percent. The move, which was forced because a credit line was coming due this fall, will slash debt to $50 million from $590 million. The current owner, Istithmar World, the investment arm of state-owned Dubai World, paid $942 million for Barneys at the top of the market in 2007. Istithmar will retain some ownership of the chain. From the WSJ:
Barneys has struggled before, going through bankruptcy proceedings in the late 1990s. After Istithmar's buyout, the global recession took hold, crimping consumer spending. Barneys' larger rivals including Neiman Marcus Group Inc. and Saks Inc. SKS -0.74% have proved more financially stable, with larger and more numerous stores. But Barneys' fortunes have turned of late. After a long drought without a chief executive, Barneys hired Mark Lee, the former head of the Gucci brand, to lead the retailer in August 2010. The company's earnings before interest, taxes, depreciation and amortization rose 40% to $34 million for the fiscal year ending in January, helped by a record December.
Besides the flagship NY location, Barneys has a store on Wilshire Boulevard in Beverly Hills.