Baugur Group

Infobox_Company
company_name = Baugur Group hf
company_
company_type = Private
foundation = Reykjavík, Iceland (1998)
location = Reykjavík, Iceland
industry = Retailer, Real estate
key_people = Jón Ásgeir Jóhannesson, CEO
num_employees =
products = Retailer, Investment company
revenue =
homepage = [http://www.baugur.is http://www.baugur.is]

Baugur Group (IPA| ['pøyɣʏr] in Icelandic, otherwise often IPA| ['baʊgə(ɹ)] ) is an Icelandic investment company.

History

In 1989, The Baugur Group was started by the opening of a single 'Bónus' supermarket in Reykjavík by Jón Ásgeir Jóhannesson and his father, Jóhannes Jónsson. The company grew quickly and within three years was operating several supermarkets in Iceland. In 1992, the owners of Hagkaup, the leading domestic retailer, acquired 50% of shares in Bonus. In 1993, Hagkaup and Bónus established a joint purchasing company named Baugur.

Hagkaup was established over 50 years ago and, as a retailing pioneer, opened both supermarkets and department stores in Iceland. Hagkaup and Bonus merged as Baugur in 1998 and Jón Ásgeir Jóhannesson became the company's President and CEO. Baugur was listed on Icelandic Stock Exchange the same year.

In 1999, Baugur signed franchise agreements with The Arcadia Group and Debenhams for Scandinavia and today Hagar, (formerly Baugur-Iceland) runs several Topshop and Miss Selfridge stores in Iceland and Sweden as well as three Debenhams stores.

The Baugur Group has experienced rapid growth in recent years, and at the end of 2003, became the largest privately-owned Icelandic company, as well as the most internationally diverse.

Baugur changes to Baugur Group

In 2002, proposals were approved concerning a change in the name of Baugur hf. to Baugur Group hf. and changes to the company's organizational structure.

Baugur hf. was divided into three independent profit centres: Baugur-Iceland, Bonus Stores Inc., and Baugur-ID. Baugur hf. changed its name to Baugur Group hf. and became a holding company.

Baugur Group delisted from ICEX

In May 2003, a redemption offer worth 10.85 Icelandic krónur (£0.09) was made by Mundur, for the outstanding stock—Mundur holding company is backed by Gaumur, KB Banki, an Icelandic investment bank; and two private investors—and in July 2003, Baugur Group was delisted from the Iceland Stock Exchange.

The year 2003 was a milestone in Baugur Group's foreign operations. At the beginning of the year, Baugur Group held shares in a few listed companies in Britain, whereas, at the end of the year, it was the most internationally extensive Icelandic company.

Briefly, it can be said that Baugur Group's investment activities in Britain can be split into two categories. On one hand, Baugur Group continued to invest in listed companies that are regarded to have better futures, either because their current management is in the process of improving the company's operation, or because new shareholders are expected to step in to instigate improvement. Among the companies, which Baugur Group has invested in on these premises are the Big Food Group, House of Fraser, and Somerfield.

On the other hand, Baugur Group has formed a strategy to take part in management takeovers. These companies control strong brand names and are considered to have substantial opportunities for growth, show a net profit, and management has shown and proven its ability to succeed. During the year 2003, Baugur Group acquired three such companies: Hamleys, Oasis, and Julian Graves.

May 2004:, Baugur Group, along with other investors, acquired the majority in the British jewellery chain Goldsmiths, in cooperation with the company's management, for the amount of ISK 14.4 billion.

February 2007:, it has been suggested that Baugur have interest in buying Irish retail shop A-Wear at a cost of €90 million. A-wear are one of the most successful clothing ranges in both the Republic of Ireland and Northern Ireland.

May 2007:, its rumored that discussions between Baugur and Sir Philip Green were underway to acquire the retail chain Bhs (British Home Stores)

Controversy

In July 2005 company founders Jón Ásgeir Jóhannesson and Jóhannes Jónsson were charged on 40 counts including tax and accounting irregularities and embezzlement. Jón Ásgeir Jóhannesson has accused the then prime minister, Davíð Oddsson of orchestrating a vendetta against him. In the autumn of 2006 the Danish newspaper, Ekstrabladet ran a series of articles, alleging that the network of companies around Baugur were associated with corrupt Russian millionaires and politicians, and hinting that Baugur might be associated with money laundering. [http://ekstrabladet.dk/nyheder/samfund/article242540.ece] . Baugur chairman, Hreinn Loftsson denied this in 2005, saying: " [t] here is no Russian money. It is rubbish. Iceland is a rich society.". Journalists have expressed incredulity that a country as small as Iceland could generate the amount of money needed to finance Baugurs activities. [http://icelandreview.com/icelandreview/daily_news/?ew_news_onlyarea=content1&ew_news_onlyposition=0&cat_id=16567&ew_0_a_id=143718]

Ekstra Bladet have since had to issue an [http://multimedia.ekstrabladet.dk/eb/archive/00323/Kaupthing_323221a.pdf apology] under threat of a [http://www.schillings.co.uk/Display.aspx?MasterId=3815c1da-d403-4f2c-b17a-209d75a1b4d2&NavigationId=287 lawsuit] in British courts.

Baugur Companies

Hagar
*Bónus "supermarket"
*Hagkaup "supermarket"
*10-11 "convenience store"
*Útilíf "sports shop"
*Debenhams "department store"
*Topshop "boutique"
*Miss Selfridge "boutique"
*Dótabúðin "toyshop"

Baugur
*Stoðir "asset management" (49.6%)
*Húsasmiðjan "home improvement store" (45%)
*Tæknival "IT company"
*SMS "supermarket", Faroe Islands
*Kaldbakur "investment company" (24.76%)
*365 "media corporation" (30%)
*Smáralind "shopping mall" (20%)
*Runs Allianz in Iceland.
*Dagsbrún

Foreign Investments
*Woolworths Group plc (7% [http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article728803.ece] ) "general merchandise business"
*Goldsmiths "jeweller"
*Julian Graves "health food shop"
*Big Food Group (Booker Cash & Carry plc and Iceland) "cash-and-carry and supermarket".
*Oasis "boutique"
*Karen Millen "boutique"
*Hamleys "toyshop"
*Somerfield "supermarket" (3%) - take over bid made February 2005, bid withdrawn July 2005
*Coast [http://www.coast-stores.co.uk/site.htm] "boutique"
*Whistles "boutique"
*MK One "value boutique"
*Magasin du Nord "department store" (83% with Straumur Investment Bank and B2B Holdings)
*Illum "department store"
*Keops "Real estate"(30%)
*Merlin "Electronic appliances"
*Woodward Foodservice "caterer"
*Shoe Studio Group "shoe retailer"
*D'Angleterre "Hotel"

Goldsmiths jewellery

Goldsmiths, which was established in Newcastle upon Tyne in the year 1778, operates 165 jewellery stores in Britain and is the second largest in the country in its sector. Goldsmiths is the largest retailer of Rolex, Cartier, Omega, Tag Heuer and Gucci in Britain. Goldsmiths was delisted from the stock exchange in 1999 in a management take-over in June 2004.

Recent acquisitions

In June 2004, the founders of Karen Millen agreed to sell the business to the Oasis Group (controlled by Baugur Group) in a deal valued at £120 million, creating a leading womenswear retailer with four strong brands—Oasis, Coast, Karen Millen, and Whistles; creating a group with over £350 million in sales in 550 stores.

Oasis is aimed at independent, fashion conscious 18-30 year old women and operates from 281 outlets across 14 countries including the Republic of Ireland, the UK and France; Coast is a destination brand for women's special occasion clothes with 135 outlets; Karen Millen has a niche position away from the mass market, bordering on the designer brands; and Whistles has more-grown-up styling and quirkier taste than the rest of the high street.

On the 14 November 2004, Baugur bought with investment the value boutique MK One with 175 stores in the UK.

Later, the Oasis Group changed it name to Mosaic, listed on the ICEX.

On the 25 August 2006, the takeover of House of Fraser by Baugur Group was confirmed. Baugur reportedly paid £351m for the company.

Board of directors

*Hans Christian Hustad
*Hreinn Loftsson (Chairman)
*Gudrún Pétursdóttir (Alternate Board Member)
*Kristín Jóhannesdóttir
*Þórður Bogason (Secretary of the Board)
*Ingibjörg S. Pálmadóttir
*Jóhannes Jónsson
*Einar Thór Sverrisson - Alternate Board Member

External links

* [http://www.baugurgroup.is Baugur's home page (in Icelandic and English)]
* [http://ekstrabladet.dk/nyheder/samfund/article242540.ece Ekstrabladet article on Russian connections] ]
* [http://www.ft.com/cms/s/406731f4-ef44-11d9-8b10-00000e2511c8.html Financial Times article about the legal battle in Iceland]
* [http://icelandreview.com/icelandreview/daily_news/?ew_news_onlyarea=content1&ew_news_onlyposition=0&cat_id=16567&ew_0_a_id=143718 Iceland Review on Baugur]