LONDON — Sir Philip Green has finally put an end to speculation that stretches as far back as 2007, selling his BHS retail chain for an undisclosed sum in order to focus more on Topshop and the other brands in his Arcadia Group Ltd.
On Thursday, billionaire Green, one of Britain’s richest men, revealed that he sold BHS to a newly formed company called Retail Acquisitions Ltd., which is made up of a group of entrepreneurs, lawyers and bankers who formed the vehicle specifically to buy the retailer. The sale includes 171 BHS stores in Britain, Bhs.co.uk., and 88 international franchises in regions such as the United Arab Emirates, Russia and Malaysia. The general merchandise stores, fixtures on high streets up and down the U.K., sell everything from clothing, fashion accessories and gift items to home lighting, bedding and furniture. BHS sells food in three stores.
Green bought BHS in 2000, and since then has been hopscotching between its head office near Baker Street in London and the offices of Arcadia Group, near Oxford Circus, a 10-minute car drive away. Arcadia’s other high-street women’s brands include Miss Selfridge, Wallis, Evans and Dorothy Perkins.
The terms of the deal were not disclosed, although a spokesman for Retail Acquisitions said the business was sold debt-free.
In a telephone interview Thursday, Green said he’s ready to move on and is relieved he’ll have more time to focus on Topshop, Topman and his other businesses. “I was too stretched, and this will free up a lot of my time. We opened a Topshop yesterday in New Zealand, we’re opening one in Atlanta today. We’re also opening in Houston,” he told WWD. “Now, all my time is going to be spent in one location instead of two. I’m going to have a proper review of all the Arcadia companies and get focused on what businesses we want to drive, and what we want to do.
“Who knows? Maybe we’ll get lonely and decide we need another business. Why rule it out? I feel comfortable with the sale, and there’s a lot of work to do. There’s a platform and a base at Arcadia,” Green added.
Earlier in the day, he said one of his objectives was to find a buyer with a desire to take BHS forward.
“They wanted to run the business, they were talking to the management. In principle, they liked the plan — and didn’t want to do anything crazy. There’s a commitment in terms of finance, if they sell assets, the money goes back into the business,” Green said.
He added that BHS was handed over “in a sound financial position with significant cash balances and banking facilities in place.”
Kevin Smith, chairman of Retail Acquisitions, called the purchase “a fantastic opportunity to breathe new life into this iconic British high-street brand.”
He noted the firm would back the existing management and invest in their plan. “We are convinced that with strategic and focused support, we will return BHS to profitability and safeguard the workforce,” Smith added.
A spokesman for Retail Acquisitions added that the investors were looking to appoint a new chairman and chief executive officer at BHS, both with a retail background.
The most recent speculation about a BHS sale cropped up in January, and a spokeswoman for Green confirmed that several potential buyers had emerged over the past few months. She made the statement after reports in the British press that Green had been quietly shopping BHS around. Green was thought to have received approaches from suitors including Primark, the South African entrepreneur Christoffel Wiese, and the U.S. hedge fund firm Apollo.
Last year, when discussing Arcadia’s full-year results, Green described the performance of BHS as “challenging,” noting “this sector of retail continues to be very tough.”
As far back as 2007, there were reports that Green planned to off-load the retailer, which he acquired from the-then Storehouse in 2000 for 200 million pounds, or $299.6 million. Even at that time, there was talk about dedicating more time to Topshop and its brother company Topman, which have undergone major international expansion, particularly in the U.S., in past years.
According to the latest BHS accounts filed with the U.K.’s Companies House, the retailer recorded a net loss of 55.3 million pounds, or $86.3 million, in the year ended Aug. 31, 2013, narrowing from a net loss of 82.1 million, or $128.9 million in the previous year. Sales for the period were 675.7 million pounds, or $1.05 billion.
While he may have been perpetually pressed for time, Green enjoyed running BHS, and — as with most of his companies — was deeply involved with the merchandise and its performance on the shop floor.
He liked the BHS Christmas buy in particular — trawling through piles of samples of gifts, including gumball machines, stuffed animals and themed ceramic mugs. Asked if he’ll miss that part of the business, Green replied: “They’ve asked me to come and do the Christmas shop for next year.”