NEW YORK, United States — Barneys New York has agreed to sell its assets to Authentic Brands Group and B. Riley Financial Inc. for $271.4 million, according to court documents filed Wednesday night. If the purchase goes through, ABG will close all seven of Barneys' remaining stores and liquidate its merchandise.

The agreement Wednesday kicks off a final round of bidding before the ailing department store is auctioned off in bankruptcy court next week. Liquidation for store merchandise could begin as soon as next week, according to one vendor.

According to a Barneys spokesperson, liquidation cannot happen until after the bankruptcy court approves the deal. The sale hearing is scheduled for October 31.

“This development is a positive step forward for Barneys, and a strong recognition of the value of Barneys’ assets and brand name. We are encouraged by the stalking horse bid by Authentic Brands Group in partnership with Saks Fifth Avenue," the Barneys spokesperson said in an email statement.

ABG, a licensing company that has built a portfolio around distressed brands like Nine West and Juicy Couture, as well as the intellectual property of deceased celebrities, emerged as a frontrunner to buy Barneys last week, alongside Saks-owner Hudson's Bay Company. According to a Wall Street Journal report, ABG plans to license to Saks Fifth Avenue, which would open Barneys shop-in-shops within some of its own stores.  ABG's co-buyer, B. Riley Financial Inc., is one of Barneys' lenders in bankruptcy.

Barneys filed for Chapter 11 bankruptcy in August, after years of lagging sales thanks to stiff competition from e-commerce upstarts and changing consumer behaviour. The primary cause of its bankruptcy, however, is the 72 percent rent hike at its nine-story Madison Avenue store, from $16.2 million annually to $27.9 million, which went into effect in January. This was the result of an arbitration ruling after the store and its landlord, Ben Ashkenazy, failed to agree to the terms of a new lease.

ABG did not immediately respond to requests for comment.

The court documents Wednesday confirm that ABG will serve as the so-called “stalking horse” bid for Barneys, the starting offer in an auction process that ends on Oct. 22. If no other parties put in higher bids, then ABG and B. Riley will acquire the New York-based chain.

Backed by private equity firm BlackRock, ABG has built a lucrative business out of licensing its intellectual property to vendors and manufacturers of myriad products, from shoes to CBD cream. Without ever holding inventory, ABG’s profits come from the royalty fees from its partners.

ABG hasn't been the only interested party in the running. A group of fashion executives led by Kith investor Sam Ben-Avraham was also rumoured to have sought the stalking horse bid earlier this month.

"We appreciate the ongoing interest by Sam Ben-Avraham and are actively pursuing additional options with those who have expressed their intent to submit bids during the upcoming auction process," the Barneys spokesperson said.

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