Topshop and Topman sale to Leonard Green & Partners values high street chain at £2bn
Sir Philip Green has sold a 25% stake in Topshop and Topman in a deal that values the high street chains at £2bn.
Green, who started his career in fashion when he left school at 15, sold the stake to one of the owners of J Crew, the American fashion brand favoured by Michele Obama and her daughters.
He said the partnership with Leonard Green & Partners (LGP), which also owns a stake in Whole Food Markets, would be “extremely beneficial” in helping drive Topshop and Topman’s expansion across America.
Green made the ambitious decision to launch the brand in New York three years ago. Topshop now also has flagship stores in Chicago and Las Vegas, and is planing to open 20 more.
He said the deal means his Arcadia Group retail empire, which also includes Miss Selfridge, Bhs and Dorothy Perkins, is now debt free and cash positive. “[This gives us] flexibility to look at other opportunities to consolidate or acquire, either on our own or in partnership with LGP, who have substantial capital available in their new fund”, Green said.
“This is a very exciting time for Arcadia Group, with a clear strategy now in place for Topshop/Topman to become major global players.”
Green gained control of Topshop when he bought Arcadia for £850m in 2002 and turned its fortunes around with brand director Jane Shepherdson, who transformed it into one of the most popular fashion destinations for young people. Its sister brand Topman finally made fashion cool for young men.
However, despite his business success, it was his audacious but failed £9bn bid for Marks & Spencer in 2004 – complete with pavement scuffle involving then M&S boss Sir Stuart Rose – that propelled Green into the national consciousness.
Green is worth £3bn according to the Sunday Times rich list and has become a fixture in the fashion business. Topshop is a major sponsor of London Fashion Week with Kate Moss among his friends. As well as adding glamour to his brand, the model designs clothes for his shops, as do the American Kardashian sisters Kim and Kourtney who last month put their name to a range of clothes in Dorothy Perkins.
Arcadia recently reported flat sales of £2.7bn for the last year. Even so, profits before tax and one-off items rose 25% to £166.9m as better stock management paid off. Like-for-like sales dropped 3.2% in the UK.
He used the results to launch an attack on retailers he believed were making too many excuses for poor performance. “We’ve got to trade. I can’t keep listening to all these people making it up as they go along,” Green said. “We’ve got to up our game. If we sit there and cry and put on my front window the Bank of England said X, it isn’t going to help me take any money.”
For the seventh year running the billionaire, who is based in Monaco, did not pay himself a dividend in 2012. In 2005 he pocketed a £1.2bn payment – the biggest pay cheque in British corporate history. It wasn’t taxed as it was paid to his wife Tina, who is the direct owner of Arcadia and also lives in Monaco.
When he turned 60 earlier this year, the couple threw a four-day party in Mexico that is estimated to have cost £6m. The 150 guests were asked to turn up with their passports and warm-weather clothes at Luton airport, where they were loaded into private jets and whisked off to a swanky beach resort in Cancun, hired by Green.