UPDATE: Baugur has had its application to go into administration proved by the High Court.
Baugur Group, the Icelandic group which has stakes in Hamleys, House of Fraser and supermarket Iceland, is applying for its UK operations to go into administration.
The group had attempted to avoid administration by applying for protection from its creditors in Reykjavik, but announced this morning (February 6) that they were willing to put their UK operations into administration instead.
In a statement the company says: “BG Holding will not oppose the application of [creditors] Landsbanki Islands to put BG Holding into administration in the UK, to be heard at the High Court of Justice this morning. This decision has been taken to minimise any further jeopardy to the ongoing operations of Baugur´s portfolio companies.”
The group has been badly affected by the collapse of banks in Iceland, but say it has every confidence that its UK retail operations can succeed in the long term.
Gunnar Sigurdsson, chief executive of Baugur Group, says: “Following the collapse of the Icelandic banks, it has been our priority to protect the portfolio companies and ensure minimal disruption to the businesses, their employees and other stakeholders.”
He adds: “In the interests of the portfolio companies, we have decided to not oppose the administration of BG Holding and will work with Landsbanki´s resolution committee and provide all possible support to the businesses. The portfolio contains strong brands and excellent management teams, which are well-positioned to build on their strengths over the coming years.”
It is unclear how UK operations will be affected by the decision. Hamleys, of which Baugur owns 63.7%, has said that the application for court protection would have no direct impact on its business, but were unable to comment on the administration proceedings.
In September, Hamleys appointed Matt Webb as its head of marketing, following the departure of its marketing director Stella Hartley after two years (MW, September 18).