Sir Philip Green is believed to be selling off a 25% stake in Topman and Topshop - a deal which Victoria Gallagher believes will ensure long-term growth across the pond.
Arcadia already dominates the UKs high streets and, with little space left for expansion domestically, it is no wonder that Green decided to look further afield.
The appetite for Topshop and Topman among US consumers has already been tested. The third major US store opened this year in Las Vegas, in a 20,000 sq ft space and a Los Angeles shop opens next spring. In July Green struck an agreement to open Topshop and Topman departments in 14 of Nordstrom’s department stores, further building the brand image across the country.
Topman, the menswear retailer, started wholesaling some of its collection overseas in 2007, but expanded that to include footwear, its Topman Design and LTD ranges and any designer collaborations. New York cult indie Opening Ceremony is among Topman’s stockists.
But while Topshop and Topman are undoubtedly the jewels in Arcadia’s crown, cracking the States has always been tough. You only need to look at today’s news that Tesco is planning to exit its business there to see how even behemoth brands in Britain can struggle.
The two Arcadia retailers have strong British fashion credentials, boosted by its Fashion Week appearances and collaborations with the likes of Mary Katranzou and JW Anderson.
But by aligning the businesses with those that Leonard Green & Partners already invests in - J Crew for example - Green may be able to successfully graft his very English company onto one that knows the idiosynchrosies of the local market.
Some may question why Green would want to sell off any of the two retailers, given that they are the strongest parts of his business. But as a way to enable growth, the deal looks very sensible indeed.