Baugur (Hamleys, Iceland, House of Fraser) seeks creditor protection

Cannon_Fodder

http://newsvote.bbc.co.uk/1/hi/business/7869342.stm

"The Icelandic retail investor Baugur, which owns Hamleys, House of Fraser and the Iceland frozen food chain, has asked for protection from creditors."


Awaiting clarification of whether its the whole group, or partial...

Conflict

List of Baugur Companies to show the scale of this problem (taken from Wikipedia) -

• Arcticgroup
• Scandinavian Design & Retail
• Steinunn
• Matthew Williamson
• Day Birger et Mikkelsen
• Souk
• eCommera
• Saks
• French Connection
• Iceland supermarket[1]
• Wyevale Garden Centres[1]
• Hamleys [2]
• Magasin du Nord department store (83% with Straumur Investment Bank and B2B Holdings)
• Visual Communications Group
• Illum department store
• Jane Norman - bought 2007-07-29 for £117m[3]
• All Saints
• Debenhams (13%)[2]
• House of Fraser - (35%)[1]
• Aurum[2]
  • Goldsmiths
  • Mappin & Webb
  • Watches of Switzerland
• Mosaic Fashions (49%) [1]
  • Anoushka G
  • Coast
  • Karen Millen
  • Odille
  • Oasis
  • Principles
  • Shoe Studio
  • Warehouse

Really2

This should have no real effect on their business's they are sharholders in.

http://www.ft.com/cms/s/0/6698b058-f2a3-11dd-abe6-0000779fd2ac.html

"Industry experts said that the most likely scenario was that operation of the stores would continue as normal, but the shareholdings in them held by Baugur would pass to the banks from which Baugur had borrowed to finance its investments."

Lanbanski wanted them to resturcture they did not want to so looks like the bank pulled the plug.

Conflict

Really2 wrote: »

This should have no real effect on their business's they are sharholders in.

Normally it shouldn't but given the current economic situation expect the most struggling of these companies to probably be wound up once ownership is transfered.

Really2

Conflict wrote: »

Normally it shouldn't but given the current economic situation expect the most struggling of these companies to probably be wound up once ownership is transfered.

Why they do not have full ownership of most so surely if the bank wants to get its money back it would sell the shares or the companys.

Why would they wind up viable business's to make a loss on their asset?

Conflict

Really2 wrote: »

Why they do not have full ownership of most so surely if the bank wants to get its money back it would sell the shares or the companys.

Why would they wind up viable business's to make a loss on their asset?

Its only the ones they have full ownership of that list are at risk, and they will be wound up if they are hemoraging money when ownership is transferred - which some of them will be doing, as such there new owners will probably view them as none viable businesses. Given that near enough nobody is interested in buying retailers at the moment it means there is only one option open to the new owners.

When you got a portfolio that big some of them will be gems and some of them will be **** which needs to cease existing.

fc123

I trade alongside 2 of their facsias.
One (a jewel in the crown) looks a little bare at the moment, but may be due to the fact that they don't have credit ins at the moment and some suppliers are holding back unless paid pro forma.

Manageress was telling me that they needed a new supervisor. Advertised, interviewed and selected .....to then be told they couldn't employ one afetrall and they would just have to do without. That was last week

Jane Sheperdson has managed to re finance Whistles, so that won't be affected.

Good old P Green is circling around Priciples, Oasis and Warehouse. Then he can 'control' much of the mass market, young fashion out there in the shopping centres. He can then dictate price points, rents and the rest.
A kind of Arcadia-opoly.

The end of the Icelandic, retail, pyramid scheme. Watch rents start to fall.

Baugur firms insist they are "unaffected" by its bankruptcy

• Published: 04 February 2009 09:49
• Author: [EMAIL="JessicaPriceBrown@emap.com"]Jessica Price Brown[/EMAIL]
• More by this Author
• Last Updated: 04 February 2009 09:49
• Reader Responses

Jon Asgeir Johannesson, the chairman of Baugur

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The management teams at Baugur's fashion retail investments insist that their businesses are unaffected by Baugur's application for bankruptcy, which was prompted after Landsbanki bank terminated talks about a restructuring of the investment firm yesterday.


Baugur said in a statement this morning "This morning Baugur Group and a number of its wholly owned subsidiaries BG Holding have applied to the district court in Reykjavik to enter into the moriturium process. This action has been taken in order to protect the group's assets as well as the interests of all creditors. The board of the company unanimously resolved to take action following yesterday's decision by Landsbanki to discontinue discussions regarding a potential restructuring of the group."
The filing is understood to be the equivalent of Chapter 11 bankruptcy which is used in the US to protect creditors.
Sources told Drapers that Baugur, which has minority stakes in Mosaic Fashions, House of Fraser, All Saints and Jane Norman, would cease to exist if the full administration goes ahead.
However, the majority of its fashion retail investments are expected continue to trade as normal but there could be issues around changes in ownership and change of control at some of the businesses.
Sources told Drapers that Baugur's shareholdings in the firms were likely to revert to the banks involved. Alternatively pre-emptive share rights will kick in and the majority shareholders in each business will be given first refusal to buy the shares.
Baugur has a 49% stake in Mosaic Fashions, which owns Oasis, Warehouse, Karen Millen and Coast. Mosaic Fashions confirmed to Drapers there would be no affect on its business but declined to comment further this morning. Speculation suggests Kaupthing, Mosaic's bank could take over Baugur's shareholding in the firm.
Baugur holds a 35% stake in House of Fraser. House of Fraser could not be reached for comment this morning but its other shareholders have always maintained that while they supported Baugur, they would step in to take over its shareholding should it become necessary. However Landsbanki could look to take this shareholding over itself.
All Saints is also not thought to be affected. Baugur has around 35% of the business. Entrepreneur Kevin Stanford is thought to be the majority shareholder in the young fashion chain.
Jane Norman chief executive Saj Shah said: "We are extremely sorry to hear the sad news about Baugur going into administration. This does however have no impact on Jane Norman's operations or finance."
Baugur has a 39.5% stake in Jane Norman.
Whistles chief executive Jane Shepherdson told Drapers this morning that the womenswear business was also unaffected. Baugur is believed to have recently pumped £500,000 into Whistles as part of a refinancing package.
It remains unclear what will happen to Baugur's stakes in Matthew Williamson and Day Birger et Mikkelsen. However US investment firm TSM Capital is a significant shareholder in Matthew Williamson and could potentially takeover Baugur's 26.6% of the business.

• Author: [EMAIL="JessicaPriceBrown&#64;emap.com"]Jessica Price Brown[/EMAIL].

Really2

Conflict wrote: »

Its only the ones they have full ownership of that list are at risk, and they will be wound up if they are hemoraging money when ownership is transferred - which some of them will be doing, as such there new owners will probably view them as none viable businesses. Given that near enough nobody is interested in buying retailers at the moment it means there is only one option open to the new owners.

When you got a portfolio that big some of them will be gems and some of them will be **** which needs to cease existing.

I agree on that, just that your first post made it sound like they would wind all of them up.

Cannon_Fodder

"anticipate the transfer of shares in an orderly fashion" - hope so, but do banks WANT 49% of a fashion outlet...don't they NEED the cash themselves, so will need to sell them on...?

Then, presumably, suddenly flooding the markets with shares to recoup money will damage the position of otherwise viable firms, or at least reduce the share price?

Especially if the banks cannot find any buyers for the shares.

Other investors, only fearing that the price MAY fall could create their own run on a firm, by getting out while the price is high?

Further reducing the amount the banks can recoup from the shares - then, will they even accept the shares, or demand cash instead?

Complex. Domino effect of not being first onto the market, less potential cash out there to come in and save them...?


edit - interesting further analysis at http://www.ft.com/cms/s/0/6698b058-f2a3-11dd-abe6-0000779fd2ac.html?nclick_check=1

funkyfreddy9k

Arcadia is about to get a whole lot bigger I suspect.

amcluesent

Arcadia & Tesco own the highstreet. Online - Amazon and Tesco?