December 4, 2012 9:04 pm

Green nears Topshop stake sale

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Sir Philip Green©AFP

Sir Philip Green

Sir Philip Green, the retail entrepreneur, is close to selling a 25 per cent stake in Topshop and Topman to a US private equity investor, in a move that could value the two jewels in the crown of his Arcadia retail empire at about £1bn.

Sir Philip, who recently reported a 25 per cent increase in underlying profits at Arcadia, is in advanced talks with Leonard Green & Partners and could announce the sale of the minority stake as early as Thursday.

The deal would represent the first time Sir Philip has accepted outside investment in his family-controlled group since he acquired Arcadia for £840m a decade ago.

Sir Philip and Arcadia declined to comment.

People close to the situation insisted the transaction did not pave the way for an exit by the retail billionaire but instead heralded a new phase of growth for Topshop and Topman, which are forging into the US.

No other parts of Sir Philip’s retail group, which includes department store BHS and high street names including Evans, Dorothy Perkins and Miss Selfridge, are included in the scope of the deal.

Leonard Green is an investor in J Crew, which is run by Sir Philip’s friend Millard “Mickey” Drexler, and which recently announced plans to open its first UK store.

The private equity group is also an investor in US department store chain Neiman Marcus. This year, the buyout firm raised $6.25bn to make further investments.

The potential deal, first reported on Sky News, comes just two weeks after Sir Philip raised the possibility of participating in further industry consolidation.

“Is there one more big deal? Who knows. I don’t have one incidentally today,” he said. “The answer is we are at the table if there are opportunities, and I think there are.”

He also said that he wanted to take Topshop and Topman further into the US and was also eyeing China.

“We want to conquer America properly. We want to go to China. We want to go to other parts of the world,” he said.

This year, Sir Philip stuck a deal with US department store chain Nordstrom to open Topshop and Topman outlets in up to 100 of its US department stores. It is not clear how this agreement would be affected by the expected transaction.

The anticipated sale of the stake in Topshop and Topman would also represent Sir Philip’s first foray into significant merger and acquisition activity since he make a hostile takeover approach to high street stalwart Marks and Spencer in 2004.

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