Icelandic retail investor Baugur files for bankruptcy protection

Baugur, the Icelandic retail investor, which owns a large piece of the UK high street, has asked for protection from its creditors.

The company, which employs 55,000 people, has stakes in Debenhams, French Connection, Karen Millen, Goldsmiths, Hamleys, House of Fraser and Iceland supermarkets.

However, despite the challenging environment the retail industry is currently facing, Nick Bubb, retail analyst at Pali International, believes Baugur’s assets will be in demand.

Baugur’s main bank terminated discussions with regard to a potential restructuring of the group, and has applied for Baugur’s UK arm to be placed into administration.

Baugur also held stakes in Woolworths and Whittard of Chelsea, both of which collapsed recently.

PriceWaterhouseCoopers is expected to be appointed administrator of Baugur’s UK arm, however, the appointment will not take place until the end of this week as a court will have to rule whether the UK or Iceland will handle the administration.

However, Baugur’s Reykjavik office was recently closed so it is expected that the UK will handle the administration.

Last year, Topshop and BHS owner, billionaire Sir Philip Green, flew to Reykjavik to buy stakes in some of Baugur’s retail chains but a deal was never reached.

Meanwhile, Dragons’ Den star Theo Paphitis is a likely buyer, according to some retail analysts.

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