TopShop Sells 25% Stake for $805 Million

Sir Philip Green, the billionaire entrepreneur behind TopShop

London—Sir Philip Green, the British billionaire retail mogul, confirmed today that he sold a 25% stake in his TopShop and TopMan retail chains for 500 million pounds, (about $805 million) a figure double what was expected.

And as expected, the stake was purchased by Los Angeles-based private equity firm, Leonard Green & Partners (LGP), which co-owns J. Crew. The sale now values TopShop and TopMan at 2 billion pounds (about $3.2 billion).

The first TopShop store was opened in the U.S. market in Manhattan in 2009. Since then, stores have opened in Chicago and Las Vegas with another one in Los Angeles slated to open in spring 2013. Sir Philip indicated that as many as 20 other stores could be open. And that’s in addition to the deal with Nordstrom to carry TopShop and TopMan collection in 100 stores.

According to Sir Philip, LGP investment is in the newly formed company TopShop/TopMan Ltd. The investment gives TopShop plenty of financial clout for its expansion plans.

“We’ve received 350 million pounds and we can draw another 600 million pounds … We don’t need that money today,” Sir Philip told Reuters.

Sir Philip’s Monaco-based company, Arcadia, which also includes Dorothy Perkins, Evans, BHS and Miss Selfridge brands, reported last month that pretax profit rose 25% in the year ended August 25. Sir Philip failed for a second time to buy Marks & Spencer in 2004.

LGP also owns stakes in BJ’s Wholesale Club, Neiman Marcus Group and Tourneau as well as its J.Crew partnership established last year.

Sir Philip indicated that LGP would not be involved in the daily management of  TopShop and TopMan.

“They’re totally hands off, they’re a financial investor, will help us with anything we want help with. They know the American market, know all the people we need to know,” said Sir Philip.

“Everybody’s always saying what a graveyard America is for British retailers. They’ve been exceptionally successful and they said ‘we’ll buy a corner and we’ll help you develop’.”

 

 

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