Baugur Has 600 Mln Stg for Investments

Icelandic group Baugur has about 600 million pounds ($1.19 billion) -- more with partners -- for investments and expansion.

Icelandic group Baugur has about 600 million pounds ($1.19 billion) -- more with partners -- for investments and expansion, its CEO told Reuters, and wants to grow its brands in markets such as the United States.

"When we invest 600 million we probably buy 35-40 percent of the companies and then we bring in partners ... so you need to multiply the 600 by four or five times to get the total value," Jon Asgeir Johannesson told Reuters on Tuesday.

But he added that "we see prices are going up and while that is happening we are looking more and more to invest more in our current portfolio."

That could include expanding its existing UK brands -- which include Karen Millen, Oasis and Jane Norman -- in markets like the United States, he said in the interview on the sidelines of the Financial Times Business of Luxury conference.

For Karen Millen, which already has about 7 stores in the United States, Johannesson said that could increase to 120 -- with costs of about 350,000 pounds for each site paying back in 2 to 2-1/2 years.

"It's getting more and more difficult to do good deals. Prices and multiples are going up," Johannesson said, adding that the highest multiple the group had paid so far was 7-8 times earnings before interest, tax, depreciation and amortisation (EBITDA) for Karen Millen, which was "worth it".

On acquisitions, he said Baugur was "actively looking into opportunities in the UK," for mid-market and up-market high street retailer opportunities, as well as in Scandinavia.

He said Baugur was "definitely" interested in the UK business of jeweller Signet "but they haven't been a seller."

"It's an interesting opportunity to combine that with our Goldsmith and Mappin & Webb business," he said, adding that upmarket jeweller Mappin & Webb was also a brand that "could travel".

Johannesson said the company was also looking at markets such as India, Russia and China.

He said Baugur would invest 10 million pounds in its flagship House of Fraser store to take it further up market -- but not to compete with top-end retailers Harrods or Selfridges.