Icelandic firm buys fashion chain

Baugur is keen to cash in on the need for retail therapy

Icelandic investment group Baugur is expanding its UK retail empire again, this time with the purchase of budget fashion chain Mk One.

Bauger is adding the 176-strong chain to its shopping basket after ironing out a deal with, amongst others, retail tycoon Philip Green.

The company is also in talks with Iceland-to-Booker group Big Food.

Other recent acquisitions include jewellery chain Goldsmiths and fashion chain Karen Millen.

Baugur is Iceland's biggest retailer and has been steadily extending its presence on the UK High Street.

Green windfall

As well as already owning a chunk of grocery company The Big Food Group, it also holds stakes in department store group House of Fraser and supermarket chain Somerfield.

Its new purchase, Mk One, caters for the bargain shopper, targeting women in the 15 to 35 age bracket, while its Sophie brand is designed for girls aged between seven and 15.

The company made profits of £15m on sales of £139m in its last financial year.

The deal means a £44m windfall will be shared between 10% stakeholder Philip Green, Mk One managing director Elaine McPherson and managing director David Thompson.

Meanwhile, Baugur's other bid target, The Big Food Group, confirmed it is still in talks with its potential suitor.