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Hamleys' Icelandic owner on brink of going bust
Lucy Tobin and Simon English04.02.09
THE future of Hamleys, Britain's biggest toy shop and a major London tourist attraction, was thrown into doubt today after its owner collapsed into administration.
Baugur, the Icelandic group that holds stakes in a host of British retailers, is on the brink of going bust.
The company - which employs 53,000 people around the world - filed for court protection from bankruptcy as its debts hit £1billion.
Baugur owns 75 per cent of Hamleys, which employs 200 people in London. The store insists it is business as usual, though it is for sale.
"We're a totally independent, ring-fenced company," said head of marketing Matt Webb. "Baugur is our major shareholder but we operate independently. We're not going to make any knee jerk reactions - we'll wait to see what happens."
Baugur has interests in thousands of stores across Britain. It owns a third of House of Fraser, and has various stakes in 20 other high street chains, including Debenhams, French Connection and Karen Millen.
It also owns part of budget supermarket chain Iceland, and is a majority shareholder in clothing chain Whistles.
Today Baugur's major lender, the state-owned Icelandic bank Landsbanki, ended talks about restructuring the group.
Landsbanki said: "Our discussions with the Baugur Group did not produce any acceptable proposals, so we have taken steps to protect the value of the companies concerned."
The news comes days after Baugur announced cost-cutting plans to axe half of the staff at its lavish Bond Street offices. Speculation about who might be interested in buying up Baugur's interests was rife in the City today.
Sir Philip Green, the billionaire owner of Topshop and Bhs, is seen as a likely candidate, though he may wait until the sellers are desperate.
In October, Sir Philip flew to Iceland to meet members of the Baugur board and the Icelandic government, but failed to strike a deal.
Private equity firms including Alchemy, Blackstone, Permira and Texas Pacific Group - which once owned Debenhams - have also been linked with parts of Baugur. Jon Moulton, the managing partner of Alchemy, confirmed he was looking at some of the group's assets.
He said they ranged from the "quite nice and quite large to the really pretty horrible and quite tiny".
But with banks unwilling to lend, there is a danger Baugur may have to sell assets off cheaply.
The High Street stores involved have tried to placate investors.
House of Fraser chairman Don McCarthy said: "The difficulties that Baugur faces do not affect House of Fraser's trading or banking position. It is business as usual."
Reader views (4)
Someone like Mohammed Al Fayed should buy Hamleys - be a perfect addition to Harrods - Imagine the fun he could have at Christmas time getting celebs to promote for him arriving in horse drawn sleighs driven by santa!! Brilliant...come on Mohammed!
- Nick, london
Baugur's loss will be somebody else's bargain.
The big difference between Hamley's and Woolworths is that with Woolworth's it was the business going bust. With Hamley's it is the major shareholder going bust.
- Andrew , London
I'd rather a few quid of my tax helped to prop up Hamleys, than was used to bail out the banks. I've always wanted to own a toy shop.
- Nobby Clark, Perth, Scotland
Sad to see Hamleys go, after Woolworths and other well-known names. Will John Lewis be next? Selfridges? Harrods? It may be that the London that comes out of the depression (the word used by the Prime Minister) will be a totally different place from the one we know now. What a massive amount the irresponsible bankers have to answer for! It's good to see that at least President Obama is planning to curtail bankers' bonus world. Why didn't Brown implement a similar pay cap on British bankers in the banks that have been publicly assisted?
- Phil Jones, London UK
