Fast Retailing eyes global markets with a $900 million offer for Barneys

09 July 2007

Mumbai: Fast Retailing''s $900 million (110-billion-yen) bid for Barneys New York Inc would be a major step forward to founder Tadashi Yanai''s goal to more than double the clothier''s group annual revenue to 1 trillion yen.

Fast Retailing Co, the operator of Uniqlo Co. casual clothing chain, has announced it proposed to buy all the shares in Barneys in a rival bid to Istithmar, a Dubai government-affiliated investment company.

Jones Apparel Group Inc., which owns the US luxury department store chain, had agreed to sell it to Istithmar for about $820 million on June 22. The agreement, however, allows Jones to consider third-party proposals until July 22.

Tokyo-based Fast Retailing has a war-chest of $1.3 billion and the acquisition would be its biggest to date. The company has been holding back since the company gave up on a bid for Hong Kong''s Giordano International last year.

The company, well known at home for its Uniqlo casual clothes brand, has built up a chain of more than 700 stores in Japan and has pledged to invest as much as 400 billion yen ($3.25 billion) over the next three years on mergers and acquisitions to almost double its annual sales to 1 trillion yen by 2010.

Fast Retailing''s offer beats the existing Istithmar bid by 9 per cent, and is more than double the $400 million that Jones paid for the New York fashion retailer in 2004.

It is uncertain whether Jones will accept Fast Retailing''s bid because it would have to pay $20.6 million (about 2.5 billion yen) in damages for breach of contract with Istithmar.

The Barneys deal, if it comes through, would follow Fast Retailing''s smaller acquisitions of foreign apparel brands in recent years.