Arcadia Group to sell stake in Topshop/Topman to Leonard Green for $563 mn

Arcadia Group, UK's largest privately owned clothing retailer, yesterday sold a 25-per cent stake in Topshop/Topman to a US private equity firm Leonard Green & Partners (LGP) for £350 million ($563 million).

The deal values the two brands of the Monaco-based company, controlled by British billionaire Philip Green, at £2 billion.

Green had bought Arcadia, including Topman/Topshop in 2002 for £850 million.

The deal will be Green's biggest after he unsuccessfully attempted to acquire Marks & Spencer in 2004.

Green said that the deal will help Topshop/Topman to expand globally after having made inroads into the US, Brazil and Australia. He also said the deal makes the rest of the Arcadia Group debt free, which stood at £309 million at the end of the company's 2011/2012 financial year.

Topshop /Topman and the rest of the Arcadia Group now have no bank debt and are in positive cash," Green said in a statement. "Being debt free gives us the balance sheet and 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."