Japanese retailer Fast drops bid for Barneys

Jones Apparel Group Inc. is set to sell its Barneys New York luxury chain to Istithmar PJSC, an investment firm that is owned by the government of Dubai, for $942.3 million after Japan’s Fast Retailing dropped out of the bidding.

Japanese retailer Fast, owner of the Uniqlo casual-clothing stores, said Thursday that it would not raise its offer.

Istithmar, which twice raised its initial offer for the luxury chain to counter Fast, may add to the seven Barneys locations, which sell Helmut Lang clothes and Fendi handbags, said Arun Daniel, an analyst with ING Investments in New York.

Jones Chief Executive Wesley Card is shedding sportswear brands to focus on the Jones New York, Anne Klein and Nine West lines.

“Barneys is in a unique position in its high-end niche, and that segment of the market is performing well,” Daniel said. “That is where the opportunities are to come in and expand the brand and add square-footage growth.”

ING holds Jones shares among the $40 billion in assets it manages.

Jones shares fell $1.71, or 8.6%, to $18.17 on Thursday. They have slumped 46% this year.

Istithmar said in February that it would spend $1.7 billion this year buying retail, industrial and financial-services companies. Since 2003, the firm has acquired New York properties including the W Hotel Union Square and a $1-billion stake in London-based bank Standard Chartered.