Sir Philip Green of TopShop confers with Hudson’s Bay Co. CEO and president Bonnie Brooks at the TopShop location inside Yorkdale Mall in Toronto Oct. 4, 2011.Tim Fraser/The Globe and Mail
British retail billionaire Sir Philip Green is in advanced talks with a U.S. private equity firm over the sale of a 25-per-cent stake in high street chain Topshop and Topman, a source familiar with the matter told Reuters.
The deal, reported earlier by Sky News, is not yet finalized but an announcement could come as soon as Thursday, the source said.
The stake would be ring-fenced from Sir Philip's larger Arcadia Group, which includes high street names such as BHS, Burton and Miss Selfridge, and could value the two chains at close to £1-billion ($1.6-billion U.S.), according to Sky News.
Sir Philip declined to comment.
The buyer could be one of the joint owners of U.S. retailer J. Crew Group Inc., private equity titans TPG Capital LLP or Leonard Green and Partners, the report said.
Leonard Green and TPG could not immediately be reached for comment.
British retailers are mostly struggling as consumers hold back spending in the face of job insecurity, rising prices, subdued wage growth and government austerity measures.
Arcadia posted a 25-per-cent year-on-year rise in underlying profit to £166.9-million in the year to Aug. 25.
Arcadia's total sales from about 2,500 U.K. stores and 615 franchised outlets in 39 countries were flat at £2.68-billion.
Monaco-based Sir Philip, who was knighted in 2006, bought department store chain BHS for £200-million in 2000, Arcadia for £850-million in 2002 and has twice tried and failed to buy Marks & Spencer Group PLC.
In an interview with Reuters in November he said he was not averse to doing another major deal if the right one crossed his table.
Sir Philip's family ranked 17th on the 2012 Sunday Times U.K. rich list with an estimated fortune of £3.3-billion.
TPG and Leonard Green bought J. Crew in 2010 in a deal valued at about $3-billion.