NEW YORK (AP) -- Japan's Fast Retailing has offered $900 million in cash for Barneys New York, upping an earlier bid from a Dubai-based investment group, owner Jones Apparel Group said Thursday.

On June 22, Jones announced it had agreed to sell the luxury retailer to an affiliate of Istithmar for $825 million. That offer was more than double what the New York-based apparel maker paid in December 2004 in its first foray into luxury brands.

The deal had been expected to close during the third quarter of 2007.

Jones' shares rose 20 cents to $28.60 Thursday.

Jones Apparel Group Inc., which owns Nine West, Anne Klein and Evan-Picone, said Thursday it will provide information to Fast Retailing Co. and begin talks with the company, although the Istithmar deal remains in full effect.

If Jones terminates the Istithmar agreement prior to July 22, it must pay a break-up fee of $20.6 million. Jones would be forced to pay $22.7 million if the deal is called off later.

Based in the western prefecture of Yamaguchi, Fast Retailing Co. operates the casual clothing chain Uniqlo. The retailer has expanded aggressively overseas, in such markets as Britain and continental Asia, with ambitions to challenge U.S.-based Gap Inc. It opened its global flagship store in New York City's Soho neighborhood last September.

Fast Retailing first told Jones it was interested in acquiring Barneys last fall, according to the company. Acquiring Barneys would add to its geographic and market diversification, Fast Retailing said.

Jones acquired Barneys three years ago in a hot luxury market with aims of diversifying its portfolio. But Jones soon came to realize that expanding Barneys would require more capital investment than it had anticipated. Jones had said last month that it planned to use the proceeds of the Barneys sale to invest in other brands and to boost shareholder value.

The heightened interest for Barneys is considered a win for Peter Boneparth, Jones' president and chief executive, who unsuccessfully put Jones up for sale last year. He was forced to take it off the market when it didn't fetch the price he was seeking.

Plenty of challenges remain for Jones as it struggles with a sluggish stock price and so-so sales in its moderate-price businesses. Jones shares have traded between $27.30 and $35.54 over the past 52 weeks.