Acquisitive Baugur set to take over Goldsmiths

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The Independent Online

Baugur, the acquisitive Icelandic retail group, is about to add the Goldsmiths jewellery chain to a portfolio of UK interests which already includes the Oasis women's clothing business and Hamleys toy stores.

A £110m deal to buy Goldsmiths from the private equity group Alchemy Partners is expected in the next couple of days.

The Icelanders are understood to have ambitious plans for the group, which could include raising the number of outlets by a quarter to about 200 in the UK, with further expansion planned in Europe.

Jurek Piasecki, the chairman and chief executive of Goldsmiths and currently a 50.5 per cent shareholder, is understood to have solicited the bid from Baugur. He will retain a stake of about 15 per cent.

Mr Piasecki took the group private in 1999, since when it has grown annual turnover by 76 per cent to £160m, with earnings before interest, tax and write-downs up by a similar magnitude to £17m. It is the UK's second largest jeweller, after Signet, the owner of H Samuel.

Bank of Scotland is taking a small equity stake in Goldsmiths, as well as putting up the debt finance for the new sale, marking the first time that Baugur has allowed outside investors in on one of its acquisitions. The Icelanders will emerge with about 55 per cent of the group.

Goldsmiths has a history extending back to 1778, when the first store opened in Newcastle.

Baugur has been building up a portfolio of businesses and what it calls "strategic investments" in the UK retail market for several years, and made an abortive attempt to take over Arcadia in conjunction with Philip Green, the retail entrepreneur, in 2002.

Most recently, it has taken a 22 per cent stake in Big Food Group, the owner of the Iceland retail chain, and was yesterday insisting that the investment in Goldsmiths did not mean the Big Food Group stake was more likely to be sold.