Extravagance retail establishment Barneys has worked through an arrangement to be sold that could keep the Madison Avenue lead alive — yet on a littler scale. Saks Fifth Avenue is collaborating with authorizing firm Authentic Brands Group to procure Barneys out of chapter 11 for $270 million, sources disclosed to The Post. The arrangement, whenever endorsed by the court, could help spare three Barneys stores — in Beverly Hills, Midtown Manhattan and Boston — and give Barneys a nearness in flourishing Saks stores, these sources said. Under the arrangement, ABG would gain the Barneys brand and Saks would pay a permitting charge to work Barneys.com and make a Barneys store inside Saks. The size of the Barneys small scale stores could be somewhere in the range of 10,000 and 50,000 squ...