US buyout firm comes shopping for a stake in Sir Philip Green's Topshop empire
Sir Philip Green in talks to sell a quarter of the high street fashion chain in deal worth £250m
Wednesday 05 December 2012
Sir Philip Green is in late-stage talks about the sale of a 25 per cent stake in his Topman and Topshop empire, a deal that could see him net £250m.
The retail entrepreneur hopes to sign a deal with the US private equity house Leonard Green & Partners as soon as this week. Retail sources say confirmation could come on Thursday.
While Sir Philip himself declined comment, analysts put the value of the empire at around £1bn. The cash injection in return for a sale of the chunk of the company would enable Sir Philip to quickly expand a business in which he has invested huge amounts of time, money and faith.
He has already taken Topshop to New York, Chicago and Las Vegas, and believes there is a huge market for its wares. It has become possibly the best-known fashion house in Britain in the recent years, raising its profile with sell-out collections by the supermodel Kate Moss and the designer Celia Birtwhistle.
Earlier this year, he struck a deal with Nordstrom, the New York-listed department store chain, to sell Topshop and Topman-branded clothing in up to 100 outlets.
LGP has a track record in the fashion trade as part owners of the US chain J Crew, a clothes company of which the US first lady, Michelle Obama, is a high-profile fan. Founded in 1989, LGP is one of the biggest private equity houses in Los Angeles. It has also taken stakes in Rite Aid and Whole Foods Market, among many other investments.
If Sir Philip pulls the deal off – the indications last night were that he would – it would make him one of the few UK business people who can truly claim to have cracked America.
Other retailers have struggled in the US, with even the mighty Tesco now battling to make its Fresh & Easy format work amid pressure from shareholders to cut losses and concentrate on its home market.
Topshop is presently part of Sir Philip's Arcadia empire, which includes Dorothy Perkins and Miss Selfridge.
Although the structure of this deal is not yet clear, it seems likely that the other parts of the business will be ring-fenced from Topshop. Sir Philip is expected to tell staff that he remains firmly committed to the other brands which are not part of this deal.
Sir Philip and his wife, Tina, are one of the wealthiest couples in the world, with a fortune estimated at £4bn.
Sir Philip famously tried and failed to take over Marks & Spencer in 2004, a bid that was resisted by the board of the company.
The spectacular deal to sell a stake in Topshop will be Sir Philip's most significant business transaction since he failed with his second attempt to buy Marks & Spencer eight years ago.
A larger-than-life figure, Sir Philip has been the focus of campaigners complaining about the tax arrangements of the rich.
Two years ago campaigners staged a sit-in at Sir Philip's flagship Topshop store in Oxford Street, and in Brighton a few demonstrators glued themselves to the branch windows, while other high streets in towns and cities across Britain saw similar protests in a day of action against the tax arrangements of rich individuals and big businesses.
Although he and Tina are based in Monaco, he points out that Arcadia has paid more than £2bn in tax since he acquired the business, including £591m in corporation tax.
Unveiling Arcadia's annual results last month, Sir Philip said profit before exceptional items rose from £133.1m to £166.9m in the year to 25 August.
Sir Philip is a prominent supporter of the Conservative Party, coming out in support of David Cameron and George Osborne just before the last General Election.
On behalf of the new Government, he carried out a so-called Efficiency Review into whether government spending and procurement could be better value for money.
Sir Philip is a big football fan with links to Everton and Tottenham Hotspur.
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