Upmarket retailer Barneys New York Inc is exploring strategic alternatives that could include the sale of the company or outside investment.

Barneys, which operates flagship stores in New York, Beverly Hills, and Chicago, emerged from bankruptcy in 1999, and is currently majority owned by two turnaround investors: Whippoorwill Associates and Bay Harbour Management.

They have focused on strengthening Barneys' reputation as a luxury retailer.

In a joint statement, David A Strumwasser, managing director of Whippoorwill and Douglas P Teitelbaum, managing principal of Bay Harbour, said: "We want to ensure that the business is best positioned to realise its potential either through a new investor or owner who is interested in building the brand and taking the business to the next level."

Howard Socol, Barneys chairman, president and chief executive, said: "We have been extremely pleased with the company's results for the past two years and believe that the company is well poised for future growth."

The company has retained investment banking firms Morgan Stanley and Peter J Solomon Co as financial advisers.

In May, Barneys said first-quarter sales rose 23.5 per cent to $112.8 million from $91.4 million in the previous year.