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Barneys' New Losses

Luxury retailer sees net sales fall 18.9 percent in 3Q

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Barneys New York Inc. announced a net loss of $8.4 million for the fiscal third quarter ended Nov. 3, 2001. Net sales declined 18.9 percent and comp-store sales declined 19.6 percent. It also announced an amendment of its credit facility with its senior lenders, led by Citibank, N.A.

For the nine months ended November 3, net sales decreased 7.7 percent and comp-store sales declined 9.2 percent.

“There is no question that retailing in general, and the luxury sector specifically, have been negatively impacted by a slowing economy and the tragic events of September 11,” said president and ceo Howard Socol. “While sales fell significantly in September, we are encouraged by an improving sales trend in the ensuing months.

“Throughout the year,” Socol added, “we have aggressively reduced expenses and believe we are well-positioned today and for when the economic climate improves.”

Barneys said the amendment of its credit facility establishes new covenant levels and interest rates, modifies other provisions of the credit agreement and provides the company with sufficient liquidity for the balance of fiscal 2001 and fiscal 2002 in order to meet the ongoing needs of the business. “Barneys appreciates the support of our senior lenders in reaching this agreement and the confidence this demonstrates in the company,” said Socol.

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Barneys New York's once-burgeoning luxury retail empire has now been reduced to eight full-price stores (including flagship stores in New York, Chicago and Beverly Hills, Calif.) and 12 outlets. After an angry and much-publicized battle with its previous owner, it went through Chapter 11 bankruptcy protection in the mid-1990s and emerged in 1999.

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