USA – U.S. luxury department-store chain Barneys New York Inc has reached an agreement to sell its assets to brand developer Authentic Brands Group and investment bank B. Riley Financial Inc, a court document showed.

The deal which is estimated to be worth US$271.4 million in cash comes as a “stalking horse purchase agreement”, according to the court filing on October in the U.S. Bankruptcy Court in Poughkeepsie.

A “stalking horse” bid is used as a starting bid or minimally accepted offer that other interested bidders must surpass if they want to buy the company.

Investors wishing to submit any further bids are can do so before the deadline which according to the court filing is October 22 this year.

In the absence of further bids by the deadline, the company will go ahead with the deal with Authentic Brands and B. Riley.

If Barneys receives any additional bid before the deadline then an auction will be conducted and its assets sold to the highest bidder.

Reuters had earlier reported that Barneys, which filed for bankruptcy protection in August citing rent hikes as a factor, was nearing a deal with Authentic Brands that could lead to Barneys shops opening in Saks Fifth Avenue stores.

According to a company spokeswoman who spoke to the wall street journal, Barneys was encouraged by the agreement but was also “actively pursuing” additional options.

The wall street journal also reported that there is a possibility that Authentic Brands could keep some Barneys stores open based on talks with landlords.

Reuters reported that a group led by fashion executive Sam Ben-Avraham has explored a bid for Barneys and was continuing to work on a potential deal that envisions keeping many of the retailer’s current stores open.

Barneys is one of the most high-profile victims of the downturn in retail, and underscores how even luxury department stores are not immune from fierce competition with e-commerce firms such as Inc.

Sears Holdings Corp, Toys “R” Us Inc and Gymboree Group Inc have also filed for bankruptcy in the last two years.

The store, now known for exclusive apparel made by designers such as Burberry Group Plc, began as a destination for middle-class families before transitioning to luxury fashion in the 1960s.