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A licensing deal by Hudson’s Bay Co. may help a bid to rescue the bankrupt luxury retailer Barneys New York Inc.

HBC’s Saks Fifth Avenue chain is in talks to license the Barneys name, as part of a bid by Authentic Brands Group LLC to take over the struggling retailer, according to a person familiar with the matter. Barneys filed for bankruptcy in August, saying it planned to close eight stores and seven Barneys Warehouse locations, keeping just seven stores open.

Saks is not interested in operating the remaining stores, according to the source, to whom The Globe and Mail has granted confidentiality because they were not authorized to speak publicly. Instead, Saks might run the website, sell some Barneys merchandise in its stores, and open Barneys-branded mini-shops within some Saks stores. The licensing fee would be “minimal” and would not be a cash drain on HBC, the person said.

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The deal is not finalized and the bankruptcy process continues for Barneys with no assurance of its survival. A spokesperson for HBC declined to comment.

Authentic Brands, founded in 2010, owns a collection of retail and consumer-product brands - Juicy Couture, Aeropostale, Nautica and Nine West are examples - as well as the rights to license the images of celebrities such as Muhammad Ali and Elvis Presley. It recently acquired the iconic magazine Sports Illustrated, then sold the operating rights to a company that cut about a quarter of the staff.

Barneys, which has been in business for more than 90 years, has struggled recently like many other traditional retailers. Store traffic has declined as rents have increased. Barneys filed for bankruptcy protection after the landlord of its Madison Avenue store nearly doubled the annual rent to $27.9-million, according to the Wall Street Journal, which first reported the Saks-Authentic Brands discussions.

HBC has had the advantage of owning many of its stores, which had made the stock an attractive pick for investors who focused on the value of its real estate. Its efforts to produce better sales numbers, however, have been frustrating. Debt-laden, the company has been cutting costs and selling off pieces of its empire. It will close 15 stores in the Netherlands by year-end.

HBC’s second-quarter comparable sales – a measure that looks at sales changes in stores open at least one year – fell 0.4 per cent. Saks Fifth Avenue’s comparable sales for the quarter, which ended on Aug. 3, grew by 0.6 per cent, while Hudson’s Bay’s comparable sales decreased 3.4 per cent. The company’s digital sales across all of its stores increased 19 per cent, it said.

Chairman Richard Baker – a real-estate developer – is attempting to take HBC private. His efforts have met resistance, as some shareholders have called the offer opportunistic and under-priced.

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