Principles and Warehouse 'on brink of sale'

Fashion chains Principles and Warehouse are on the brink of a sale that will land their owners a £130m (€187.8m) pay-day, it was reported today.

Rubicon, which bought the high street retailers from Top Shop group Arcadia three years ago, was said by The Daily Telegraph to be close to finalising a deal with Pied a Terre and Nine West owner Shoe Studio.

Shoe Studio is partly owned by Icelandic retailer Baugur, which has been rapidly increasing its presence on the UK high street.

Baugur already owns womenswear stores including Karen Millen, Coast, Whistles and Oasis, and is awaiting shareholder approval for a proposed £326m (€471.1m) takeover of Iceland owner Big Food Group.

Former Arcadia managing directors Peter Davies and Hilary Riva, the main shareholders of Rubicon, bought Principles and Warehouse along with Racing Green and Hawkshead in a management buyout with other senior staff in 2001.

Arcadia’s then chief executive Stuart Rose, now boss of Marks & Spencer, sold the struggling chains in a bid to turn around the fortunes of his company.

In a deal that involved no private equity companies, Rubicon put up £1m (€1.4m) of the £35m (€50.6m) price tag and the rest was lent to them by Arcadia.

Once the loan was repaid this left Mr Davies and Ms Riva and other senior management of Rubicon owning the whole of the group.

They later sold Racing Green and Hawkshead to focus on the now profitable Warehouse and Principles. Across the two chains Rubicon now has 150 standalone stores and 312 concessions.

Mr Davies and Ms Riva were said to be unlikely to carry on running the chains in the long-term once they have received their windfalls.

A spokeswoman for Rubicon would not comment on the report today.