Authentic Brands Group LLC is in talks to buy luxury chain Barneys New York Inc. for US$268 million and open 41 Barneys shops in Saks Fifth Avenue stores, according to a person with knowledge of the matter.

Authentic Brands would close most existing and planned Barneys stores, including potentially the flagship Madison Avenue location, said the person, who asked not to be identified because the process isn’t public. It’s also planning to open a freestanding Barneys store in Greenwich, Connecticut and other possible locations.

Authentic Brands is one of a few bidders for Barneys, which filed for bankruptcy protection in the face of rising rents. Gary Wassner, chief executive officer of Hilldun Corp., also said he’s negotiating to salvage the bankrupt company.

Barneys could name a stalking horse, or first bidder, as early as Tuesday.

Representatives from Authentic Brands couldn’t be immediately reached for comment and Barneys didn’t immediately have a comment. A representative from Saks parent Hudson’s Bay Co. declined to comment.

Transformation Needed

For Saks, a deal with Barneys could bring in younger and more trend-conscious shoppers. For Authentic Brands, it would bolster a collection of licenses ranging from fashion labels like Jones New York and Nine West to Sports Illustrated.

Wassner, whose company provides financing to the fashion industry, is also interested in Barneys.

“I’ve been looking at every conceivable option for the company and brand, and speaking with many of the various interested parties,” Wassner said in an email. “I’d like to play a part in saving the brand and some brick-and-mortar version of it, in some capacity.”

He added that Barneys remains relevant with a unique voice.

“The fashion world and the consumer needs it, but it has to be dramatically transformed,” he said. “If it liquidates entirely it will be missed.”

Barneys filed for bankruptcy protection in August and said it would close 15 of its 22 stores. Its Beverly Hills location and flagship Madison Avenue store in Manhattan weren’t on the list of stores to be shuttered.

The talks were first reported by the Wall Street Journal. Women’s Wear Daily previously reported Wassner’s involvement.

The case is Barneys New York Inc., 19-36300-cgm, U.S. Bankruptcy Court for the Southern District of New York (Poughkeepsie).

--With assistance from Kim Bhasin.