Billionaire Sir Philip Green has boasted that his Bhs-to-Miss Selfridge Arcadia retail empire is now debt-free after he sold a 25% stake in Topshop and Topman to a US private-equity firm for a larger-than-expected £500 million.
The deal with Leonard Green & Partners (LGP) values the Topshop and Topman businesses alone at a mind-blowing £2 billion, and will lead to an accelerated roll-out of the two chains in the US, Asia and other countries.
With UK consumer spending set to continue bumping along the bottom, Sir Philip, pictured, said: “The next part of our significant growth has got to be overseas.”
The retail tycoon acquired Arcadia — whose other brands are Wallis, Evans, Dorothy Perkins, Outfit and Burton — for £850 million in 2002, largely with debt.
He said all the group’s debts had been repaid: “It [Arcadia] is debt free, with cash available to grow and expand. One piece of it has had a £2 billion [valuation] put on it. How much better can it be?”
After opening combined Topshop and Topman shops in New York, Chicago and Las Vegas, Sir Philip had previously vowed to have up to 20 flagship stores in America. But he today suggested it would be more ambitious after partnering with LGP, which is also an investor in US retailers Whole Foods Market and J Crew.
He added: “LGP think we can open a lot more and be bigger. We have now got someone to hold our hand who knows the market better than us.” UK retailers have found the US a tough market to crack, highlighted by grocery giant Tesco saying yesterday it is “likely” to exit its 199-store Fresh & Easy chain in America.
Arcadia’s £500 million deal with LGP does not include the long-term lease on Topshop’s flagship store on Oxford Street. Sir Philip also has a team looking at locations in China, including Beijing, Shanghai and second-tier cities, with the first combined Topshop and Topman store expected to open there next year.
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