Because you can't have depths without surfaces.
Linda Grant, thinking about clothes, books and other matters.

Wednesday, 4 February 2009

Retail meltdown

Baugur, the Icelandic company which owns a large number of high street shops in Britain, has gone bust. Its portfolio includes Hamleys, House of Fraser, jewellers Mappin and Webb and Watches of Switzerland. Enter Sir Philip Green with a shopping list.


A Baugur spokesman explained that talks with the Icelandic banks had collapsed last night. He said that the application "to enter into the moratorium process" - the equivalent of America's Chapter 11 protection - would give the company protection from its creditors for three weeks.

The spokesman also insisted that the day-to-day operations of the companies owned by Baugur would not be affected by today's news.

"The last thing we want to do is fuel fear on the high street that jobs will be lost," he said.

One rival retail executive said selling any retail businesses would be a tough task: "Most of these businesses are doing okay and their managements have been trying to organise buyouts for some time. But it is just impossible to get any financing. The banks just aren't doing any lending. The private equity people have got money but they are still dependent on being able to put debt in as well."

Shares in French Connection slumped by 10% this morning. More than 20% of its shares are owned by a group of Icelandic investors including Baugur. Debenhams shares slipped by 3% this morning.



They own or have stakes in:
French Connection

Mosaic Fashions

Coast

Karen Millen

Oasis

Odille

Principles

Shoe Studio Group

Warehouse

Whistles

Jane Norman

All Saints

Day Birger et Mikkelsen

Matthew Williamson

Steinunn

SD&R

Arcticgroup

Department stores:

Debenhams

House of Fraser

Illum

Magasin Du Nord

Souk

Saks

Food:

Iceland

Speciality:

Hamleys

Aurum

Goldsmiths

Mappin & Webb

Watches of Switzerland

Wyevale Garden Centres

eCommera

3 comments:

Fluff Chance said...

Sounds like a bad AMERICAN MOVIE. Shocked there are so many important companies that they are covering. One needs to be very careful of what one wishes for. BEWARE the hand that gives......
Fluff Chance
http://emperorsoldclothes.blogspot.com

Anonymous said...

I work in retail, and some of these names have been floating around for the last few months; Debenhams, House of Fraser and Wyevale Garden Centres rumoured to have been especially vulnerable. Shocking to see so many big names in one go though - there's the potential to leave a lot of holes in the high street there.

Geraldine Ryan said...

My God, that's a lot of shops. Principles is my favourite because it's cheap yet their stuff is on the ball and well made for the price.