Billionaire Green Said to Be in Talks to Sell 25% of Topshop

Philip Green, the billionaire owner of the Arcadia fashion business, is in advanced talks to sell a 25 percent stake in the Topshop and Topman chains to Leonard Green & Partners LP, said a person familiar with the matter.

The deal is scheduled to be announced Dec. 6, said the person, who asked not to be named because the negotiations are private. The sale probably will value the two chains at almost 1 billion pounds ($1.6 billion), Sky News reported earlier.

The deal would be Green’s first major transaction since his purchase of the Etam chain in the U.K. in 2005. The Monaco-based businessman, who unsuccessfully tried to buy Marks & Spencer Group Plc (MKS) in 2004, said last month that he plans to pursue expansion internationally and online for Arcadia, which he acquired in 2002 for about 850 million pounds.

Arcadia’s other brands include Dorothy Perkins, Miss Selfridge, Burton and Evans, its website shows. The company had more than 615 franchised outlets in 39 countries as of the end of August, according to its earnings statement for its latest fiscal year.

Leonard Green, a Los Angeles-based private-equity firm, counts clothing chain J. Crew Group Inc. and Jo-Ann Stores Inc. among its other retail investments.

London-based Topshop, which sells mid-priced trendy styles, is known for showcasing talented young designers, including the late Alexander McQueen, and has a quirky British sensibility. For this winter season, the retailer previewed punk-inspired checked looks such as a 30 pounds pinafore that it recommended pairing with chunky black lace-ups. It also pushed retro 1960s styles, including tweed and boucle pieces it suggested wearing with beehive hairdos and slick black eyeliner.

“Fashion-Obsessed”

It reached a deal earlier this year to sell clothes from its men’s and women’s stores through Nordstrom Inc. (JWN), the Seattle-based chain of more than 100 department stores, starting in 14 stores and online this past September.

An agile operator capable of continually turning out fresh fashions -- as many as 200 new styles appear at the Oxford Circus flagship in London each week -- Topshop appeals “to youthful, fashion-obsessed customers,” Pete Nordstrom, president of merchandising at Nordstrom, said in July.

The partnership with Nordstrom was a low-risk, inexpensive way for Topshop to expand its presence in the U.S., where it has perhaps been best known for a five-year-old line of Kate Moss- designed clothes once sold at Barneys New York.

Topshop also planned to have as many as 20 U.S. stores of its own in the next three years, part of its global expansion, which is designed to reduce Arcadia’s reliance on slowing growth back home in Britain, Green, 60, said in July.

Founded in 1964, Topshop as of July operated 319 stores in the U.K., and 137 international franchises in 37 countries, selling a range of apparel from jeans to evening wear to shoes, accessories, jewelry and make-up. It owns U.S. flagship stores in New York, Chicago, Las Vegas and starting next year, in Los Angeles. Topman had 230 stores in the U.K.

To contact the reporters on this story: Paul Jarvis in London at pjarvis@bloomberg.net; Cotten Timberlake in Washington at ctimberlake@bloomberg.net

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net

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