It seems things are finally coming to a head at Icelandic investment group Baugur, after months of limbo.
Rumblings that something was afoot began last week when Drapersonline revealed that Mosaic Fashions, in which Baugur has a minority stake, had been giving interested parties access to financial information on its various businesses, which include womenswear chains Oasis, Principles and Karen Millen.
That exercise seemed to be as much about Mosaic getting a good idea about the value of its businesses for its own purposes as it was for the benefit of potential third-party buyers. Rumours then surfaced that Arcadia owner Sir Philip Green was interested in Principles. Whether he is or not is a moot point, but clearly there were signs of movement in the Baugur situation.
So it was not entirely surprising to learn this week that Baugur had applied to the district court in Reykjavik to enter into a moratorium process, which is roughly Iceland’s equivalent of US Chapter 11 bankruptcy protection. The move was prompted by nationalised Icelandic bank Landsbanki’s termination of talks about a possible restructure of Baugur.
Baugur’s UK businesses were at pains to point out that they would be unaffected. But that is not strictly true, is it? If the administration takes its full course, Baugur could cease to exist, which means some businesses could see a change of ownership or control. That may not mean a great deal in some cases, but there will be a far-reaching impact behind the scenes of the UK high street.
In the meantime, for those of you interested in buying collections rather than businesses right now, we hope our Autumn 09 Streetwear Special provides plenty of inspiration.