Green seeking an exit from BHS to focus on Topshop
Sunday 13 April 2008
Fashion tycoon Sir Philip Green is understood to be looking for buyers for BHS, his department store chain, to concentrate on Topshop, which is expanding into the US with its Kate Moss clothing range.
Retail sources close to Sir Philip said he wants to sell BHS, which along with other retailers is having a torrid time on the high street. One source said: "Sir Philip has talked to a number of people about buying BHS. He's caught in a bit of a problem – he wants to get out of BHS and spend more time on Topshop, which is going great guns.
"But selling BHS is proving tough because no one wants to take on all 180 shops at a time like this. There are many, like Primark, who would like some of the town centre sites, and M&S would like about 20 stores."
But the source added: "Philip would be loath to break up the chain, and certainly wouldn't want to put staff in a difficult position. He might just have to stick through the rough times ahead and wait until the market turns." Sir Philip could not be reached for comment but has in the past denied rumours that BHS was for sale.
Other buyers could include Sir Terry Leahy's Tesco if Sir Philip decided that breaking up the chain was the only option. Tesco said recently it wants more central sites. Both Asda and Debenhams have looked in the past but are not interested.
At a retail conference in Barcelona last week, Sir Philip warned of a fall in profits at the BHS chain, which he bought for £200m eight years ago. He said the clothes-to-homeware stores would report lower profits this year compared with operating profit in the year to March 2007 of £52.7m – a huge fall on the £114m made in 2005.
Sir Philip also predicted more pain for the high street, saying: "This isn't like a jab – it's like continual jabs. The market is probably as difficult as I've seen it, very challenging. Nobody is getting excluded from this."
Sir Philip's main stores group, Arcadia, is the UK's biggest private retailer, with more than 2,000 shops including Dorothy Perkins, Topshop, Topman, Burton, Miss Selfridge, Evans and Wallis. The Kate Moss range is now selling in Barneys in the US, and the first American Topshop store opens in October. Sir Philip wants to grow the Topshop brand – it has 300 shops in the UK and 97 overseas. He has never confirmed the plan but some retailers believe he may be preparing Arcadia, or parts of it, for a stock market listing.
Meanwhile, accountants Ernst & Young will today disclose how deeply the credit crunch has bitten into UK company profits, publishing research showing there have been 114 UK profit warnings in the first quarter of the year – the highest since 2001. The retail sector was worst hit.
Other retailers due to publish results this week are Tesco, Debenhams and Burberry, which should help provide a clearer picture of the state of the sector.
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