Baugur eyes up High Street retail group

The owner of the Principles and Warehouse fashion chains is the latest company on the shopping list of Icelandic retail group Baugur, it was reported today.

Baugur is in preliminary talks on buying a stake in retail group Rubicon and has not ruled out making a full-blown takeover offer, according to the Sunday Telegraph.

The move comes as management at Rubicon examine ways to grow the business after eliminating losses in the wake of the acquisition of the Principles and Warehouse chains from Arcadia in 2001.

Operating profits hit £18.1m (€26m) in the year to August 2003 – double the previous year and a reversal of the £9.4m (€13.5m) losses posted in 2001.

Chief executive Peter Davies and managing director Helen Riva are understood to be talking to other retail groups and Rubicon’s financial performance means there is little pressure to sell.

However, many other well-known names on the UK high street have already fallen under the control of Baugur and comprise its Mosaic Group of women’s fashion chains.

In November, Baugur clinched a £152m (€219m) takeover of the Oasis fashion brand and followed this up with a £120m (€172.9m) deal for Karen Millen in June.

It also owns the Coast and Whistle brands, while speculation has linked it to a £90m (€129.7m) takeover of womenswear retailer Hobbs.

Chief executive Jon Asgier Johannesson is reportedly keen on making further acquisitions before considering a flotation of the Mosaic Group.

In addition to its womenswear stores, Baugur owns jewellers Goldsmiths and toy store Hamleys.

Investors are also waiting to hear if its takeover approach to the board of Iceland-to-Booker group Big Food develops into a formal offer.