Jones Apparel Group Inc has completed the sale of its Barneys New York Inc unit and says it plans to use some of the proceeds to fund a $400m stock buyback.

Jones sold Barneys to an affiliate of Dubai-based private equity house Istithmar for $945m in cash after a bidding war with Japanese apparel group Fast Retailing Co, the owner of the Uniqlo casual clothing chain.

On Friday (7 September) the company said it expects to bank around $840m from the deal after tax and expenses, and in addition to the stock buyback intends to use the proceeds to repay short-term borrowings.

Wesley R Card, president and chief executive officer, stated: "The repurchase of our stock is a compelling investment opportunity and reflects the board's confidence in the future of Jones."

John T McClain, chief financial officer, added that the share repurchase will provide the company "with the financial flexibility to strategically invest in growing our brands."

Jones Apparel acquired Barneys in 2004 for $400m, and the sale to Istithmar means it more than doubled its money in just over 30 months.

Jones now returns to a business model dominated by wholesale brands and their affiliated retail operations. Among its major brands are Jones New York, Evan-Picone, Norton McNaughton, Gloria Vanderbilt, l.e.i., Nine West and Anne Klein.