Sir Philip Green sells Arcadia stake for £500m

By HOLLY WILLIAMS
Published on 06/12/2012 09:27

Topshop and Topman were today valued at £2 billion after retail tycoon Sir Philip Green sold a 25 per cent stake in the fashion chains.

The billionaire entrepreneur’s Arcadia Group, which also owns Bhs, Burton and Dorothy Perkins, netted £500 million after agreeing to sell the stake to American private equity firm

Leonard Green & Partners.

The high street magnate said the deal will help his group expand Topshop and Topman brands further across the US and into other overseas territories.

Topshop – popular with budget shoppers and fashionistas alike – has been steadily increasing its international footprint in recent years and has 615 franchised shops across 39 countries.

Green signalled a potential spending spree to come as he said the cash from the sale will remain in the Arcadia Group, leaving it debt-free and offering the “flexibility to look at other opportunities”.

He added: “This is a very exciting time for the Arcadia Group, with a clear strategy now in place for Topshop/Topman to become major global players.”

The deal follows months of talks with Leonard Green & Partners, which has a history of retail investments in the US, including organic food group Whole Foods Market, fashion chain J.Crew, Neiman Marcus luxury department stores and pet

products retailer Petco. In Arcadia’s recent full-year figures, Green said international Topshop stores were performing well, with its fledgling

Melbourne outlet on course for £15 million sales in its first year after record results.

Shops in Sao Paulo, Brazil, and Vancouver in Canada have also recorded strong opening performances.

But the wider Arcadia group saw like-for-like retail sales fall 3.2 per cent in the year to August 25 as it endured “very challenging” high street trading.

The sales disappointment was offset by moves to sell less

discounted stock, which helped improve margins and grow underlying full-year profit by 25 per cent to £166.9m from £133.1m the previous year.

Trading since the summer also picked up, with comparable store sales up 0.7 per cent, including VAT, in the 10 weeks of its new financial year.

Topshop started as Peter

Robinson’s Topshop in Sheffield in 1964, becoming a stand-alone store in the 1970s.

The chain has enjoyed unrivalled success in the UK and abroad in the past few years with the help of design collaborations with the likes of Kate Moss and Celia Birtwell.

It launched its first store in the US in New York in April 2009, which was followed by branches in Los Angeles, Las Vegas and Chicago.

Green has a fierce reputation and is known as the king of

British buy-outs.

Born in Croydon, his father died when he was 12 and he earned money helping out at his mother’s petrol station business before leaving school at 15. At 23 he borrowed money from the bank to set off on his own venture, importing jeans from Hong Kong.

But his big coup came in 2000 when he bought the ailing Bhs for £200m, multiplying its

profits within a few years.

He bought Arcadia, whose brands include Topshop and Burton, two years later for £850m, becoming a billionaire in record time.

Green made repeated unsuccessful attempts to take over Marks & Spencer, the company that employed him until he was 40.

He has two children with his wife Tina and is based in the tax haven of Monaco.