THE GOVERNMENT OF DUBAI GOES FOR IT

Fast Retailing Raises Barneys Bid After Dubai Matches Earlier Offer

Japan's Fast Retailing Co raised its offer to acquire Barneys of New York to $950 million in cash.

Meanwhile, private-equity firm Istithmar, the investment arm of the Dubai government, raised its offer to acquire Barneys to $900 million, matching an earlier bid from Fast Retailing for Jones Apparel Group Inc.'s luxury-retail chain.

Istithmar had agreed to buy Barneys for $825 million before Fast Retailing, the Japanese operator of the Uniqlo casual-clothing retail chain, entered the fray.

Jones Apparel said Istithmar had two business days to match Fast Retailing's offer. If Istithmar declines to raise its offer again, Istithmar will be entitled to a break-up fee of $22.7 million.

Last week, Jones Apparel said it swung to a second-quarter loss and cut its earnings estimate for the year. For Jones Apparel, the second quarter was a disappointing one in which fashion faux pas and steadily declining sales at its own stores and at department stores that sell its brands led to steep discounting.

The Bristol, Pa., company said results in the quarter were hurt by costs tied to severance, restructuring and a strategic review of the business. Revenue fell 2.2%. Sales at stores open longer than a year, the industry's most important growth measure, dropped 8%.

Chief Executive Wesley Card has said no offers for all of Jones Apparel, including Barneys, have been made. As a result, "There is no 'for sale' sign on the company," he said.