A woman walks past a Barneys store in New York City - Photo : Mario Tama/AFP

DUBAI (AFP) - The Dubai government's private equity arm, Istithmar, said on Saturday, June 23rd it was buying luxury speciality retailer Barneys New York for 825 million dollars from Jones Apparel Group.

Barneys, wholly owned by Jones Apparel, has flagship stores in New York City, Beverly Hills, Chicago, Boston and Dallas and has regional, CO-OP and other outlet stores.

"We are excited to acquire Barneys New York. We believe that the luxury market generally and the Barneys platform specifically have incredible growth prospects," said Khaled Al Kamda, vice chairman of Istithmar World.

Howard Socol, Barneys' chief executive officer, said : "Working with Istithmar, we look forward to continued expansion of our flagship, CO-OP and outlet concepts to help us realize the considerable untapped potential of the Barneys brand."

The acquisition is the latest of a series of investments by Istithmar in the United States. In May, 2006 the fund announced it had bought for 300 million dollars the Loehmann of New York chain of shops which had gone bankrupt seven years earlier.

In June the same year, Istithmar revealed it had bought a 32-storey building in Manhattan for 1.2 billion US dollars, and in October 2006 had acquired the W Hotel Union Square in Manhattan for 285 million dollars.