Barneys, NY's style centre, bought by Dubai

From Raw Story:



For generations, Barneys New York has been at the centre of Manhattan style, one of the world's most exclusive department stores and a shopping landmark visited by credit-card wielding global fashionistas.


Now it has a new owner - Dubai's family-controlled government, so flush from oil riches that its members have moved from splashing out on luxuries to splashing out on whole luxury goods companies. For a crisp $825m (£410m), the government's overseas investment arm has added Barneys to a portfolio of New York gems that already includes the trendy W and Mandarin Oriental hotels.


For its money, the emirate is getting a business that has grown from humble beginnings in 1923 to become a by-word for cool and a touchstone in television shows from Sex and the City to Will & Grace to Seinfeld. When Sex and the City's Carrie Bradshaw hit the shops, she hit Barneys; her alter-ego, actress Sarah Jessica Parker, once told Vanity Fair: "If you're a nice person and you work hard, you get to go shopping at Barneys. It's the decadent reward." It is where Will & Grace's Jack McFarland encountered Cher and it is where Seinfeld sidekick Elaine accused the store of using "skinny mirrors" to flatter customers into a purchase.


And it is in Barneys' spartan boutique-style ambiance that millions of monied Manhattanites have met designers such as Helmut Lang and Armani, where celebrities have kitted themselves out in designs running into thousands of dollars per piece. It has always striven to be at the cutting edge of world fashion. Where Bloomingdale's is "the head cheerleader" in school, Barneys is "the cool kid in the class, the one with the magically floppy head of hair," The New York Times memorably ruled last year.


Jones Apparel, a rag-bag retail and clothing conglomerate worth $3bn, is selling Barneys after just three years of ownership, but it has more than doubled its $400m investment. Barney's now has eight luxury stores across the US, including the flagship at 660 Madison Avenue in New York, plus a series of discount spin-offs, many under the Barneys Co-Op brand.


Istithmar, the Dubai offshoot that will own it, is promising more expansion, but none so speedily as that which got Barneys into trouble in the Nineties when customers in lesser US cities were flummoxed by its ultra-modern styles. In 1996, the company filed for bankruptcy protection, ending its control by the founding Pressman family.


Barney Pressman pawned his wife's engagement ring in 1923 to fund the first store as retailer of men's suits - many of which he acquired from the estates of deceased socialites. It was his son, Fred, who took Barneys upmarket, finding obscure European designers with which to wow a more cosmopolitan crowd.


Barneys' capture by the Dubai government comes as the oil-rich emirate expands its investments into all areas of US life. Istithmar even has a multimillion-dollar stake in Time Warner. The Dubai government has drawn back from more sensitive areas, though, after being stung with a public outcry when it tried to buy five big American ports from a UK company. Politicians queued up to argue that a Middle Eastern owner could not be trusted with security at the country's borders.