Debenhams and Arcadia race to buy Principles

Principles’ owner Mosaic, which is 49 per cent owned by Baugur but is effectively controlled by nationalised Icelandic bank Kaupthing, confirmed yesterday it had received a number of approaches for the chain.

Debenhams wants to acquire Principles so it can benefit from full margins at Principles concessions in its department stores, in line with chief executive Rob Templeman's strategy to drive own-label growth.

As revealed by Retail Week last week, Debenhams' private equity backer TPG is advising Debenhams on potential acquisitions in the wake of the collapse of Baugur.

Sir Philip Green, who owns Arcadia, is thought to be interested if the chain becomes available at a bargain price as a result of a firesale. Arcadia once owned Principles but disposed of it in 2002.

Debenhams and Arcadia declined to comment.

It is also thought that Peter Davies, a former chief executive of Principles, is also interested in the chain, although it is unclear if he has the financial backing to oppose Debenhams and Arcadia, reported The Times.

Mosaic said: “Mosaic fashions has received several approaches to see the business and is considering these within the scope of the restructuring discussions. There is no intention to split up the group further.”

The UK arm of Baugur fell into administration two weeks ago, as revealed by Retail Week.