Baugur Group (; Icelandic: ) was an

Iceland Iceland ( is, Ísland; ) is a Nordic island country in the North Atlantic Ocean and in the Arctic Ocean. Iceland is the most sparsely populated country in Europe. Iceland's capital and largest city is Reykjavík, which (along with its s ...

ic investment company. The group began as a supermarket and general retail company in Iceland, before diversifying to own a number of businesses at its peak, primarily in the

United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the European mainland, continental mainland. It comprises England, Scotlan ...

. Baugur was heavily affected by the

Icelandic financial crisis Icelandic refers to anything of, from, or related to Iceland and may refer to: *Icelandic people *Icelandic language *Icelandic alphabet * Icelandic cuisine See also * Icelander (disambiguation) * Icelandic Airlines, a predecessor of Icelandai ...

that began in 2008, and applied for bankruptcy protection in February 2009. Its largest creditor

Landsbanki Landsbanki (literally "national bank"), also commonly known as Landsbankinn (literally "the national bank") which is now the name of the current rebuilt bank (here called "New Landsbanki"), was one of the largest Icelandic commercial banks that f ...

applied to place Baugur's UK arm, BG Holdings, into

administration Administration may refer to: Management of organizations * Management, the act of directing people towards accomplishing a goal ** Administrative Assistant, traditionally known as a Secretary, or also known as an administrative officer, admini ...

that month. The group filed for bankruptcy in March 2009.

History

In 1989, the Baugur Group was started by the opening of a single 'Bónus' supermarket in

Reykjavík Reykjavík ( ; ) is the capital and largest city of Iceland. It is located in southwestern Iceland, on the southern shore of Faxaflói bay. Its latitude is 64°08' N, making it the world's northernmost capital of a sovereign state. With a po ...

Jón Ásgeir Jóhannesson Jón Ásgeir Jóhannesson (born 27 January 1968, in Reykjavík) is an Icelandic convicted criminal and former CEO of Baugur Group. Early career Jón Ásgeir's parents were Jóhannes Jónsson (1940-2013) and Ása Karen Ásgeirsdóttir (1942-), w ...

and his father,

Jóhannes Jónsson Jóhannes Jónsson (31 August 1940 – 27 July 2013) was an Icelandic businessman and one of the founders of the investment company Baugur Group, which applied for bankruptcy protection in February 2009. His warm public personality and co-foundi ...

. The company grew quickly and within three years was operating several supermarkets in Iceland. In 1992, Hagkaup, the leading domestic retailer, acquired 50% of shares in Bonus. In 1993, they merged and formed 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

became the company's President and CEO. Baugur was listed on

Iceland Stock Exchange The Nasdaq Iceland, formerly known as the Iceland Stock Exchange (XICE) ( is, Kauphöll Íslands), is a stock exchange located in Iceland. It was established in 1985 as a joint venture of several banks and brokerage firms on the initiative of the ...

the same year. In 1999, Baugur signed franchise agreements with the

Arcadia Group Arcadia Group Ltd (formerly Arcadia Group plc and, until 1998, Burton Group plc) was a British multinational retailing company headquartered in London, England. It was best known for being the previous parent company of British Home Stores (BH ...

and

Debenhams Debenhams plc was a British department store chain operating in the United Kingdom, Denmark and the Republic of Ireland. It was founded in 1778 as a single store in London and grew to 178 locations across those countries, also owning the Danish ...

for Scandinavia and today Hagar, (formerly Baugur-Iceland) runs several

Topshop TOPSHOP (originally Top Shop) is a British fashion brand for women's clothing, shoes and accessories. It was part of the Arcadia Group, controlled by Sir Philip Green, but went into administration in late 2020 before being purchased by ASOS o ...

and Miss Selfridge stores in Iceland and Sweden as well as three Debenhams stores.

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 Kaupthing Bank ( is, Kaupþing banki; ) was a major international Icelandic bank, headquartered in Reykjavík, Iceland. It was taken over by the Icelandic government during the 2008–2011 Icelandic financial crisis and the domestic Icelandic b ...

, an Icelandic investment bank; and two private investors—and in July 2003, Baugur Group was delisted from the

. 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 Somerfield (; originally Gateway) was a chain of small to medium-sized supermarkets operating in the United Kingdom. The company also previously owned the Kwik Save chain of discount food stores. The company was taken over by the Co-operati ...

. On the other hand, Baugur Group has formed a strategy to take part in management takeovers. These companies control strong

brand A brand is a name, term, design, symbol or any other feature that distinguishes one seller's good or service from those of other sellers. Brands are used in business, marketing, and advertising for recognition and, importantly, to create ...

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 Hamleys is a British multinational toy retailer, owned by Reliance Retail. The world's oldest toy store, it was founded by William Hamley as "Noah's Ark" in High Holborn, London, in 1760. It moved to its current site on Regent Street in London's ...

, Oasis, and

Julian Graves Julian Graves was a health food retailer, with 189 stores operating in the United Kingdom and Ireland, selling health foods, a limited range of kitchenware, baking ingredients and a variety of confectionery items. NBTY (which also owns Holland ...

. In May 2004, Baugur Group, along with other investors, acquired the majority in the British jewellery chain

Goldsmiths A goldsmith is a metalworker who specializes in working with gold. In German, the Goldsmith family name is written Goldschmidt. Goldsmith may also refer to: Places * Goldsmith, Indiana, United States * Goldsmith, New York, United States, a h ...

, in cooperation with the company's management, for the amount of ISK 14.4 billion. Goldsmiths, which was established in

Newcastle upon Tyne Newcastle upon Tyne ( RP: , ), or simply Newcastle, is a city and metropolitan borough in Tyne and Wear, England. The city is located on the River Tyne's northern bank and forms the largest part of the Tyneside built-up area. Newcastle is ...

in the year 1778, operates 165 jewellery stores in Britain and is the second largest in the country in its sector. In June 2004, the founders of

Karen Millen Karen Millen is a British online women's clothing retailer specialising in tailoring, coats and evening wear. Formerly a high street chain with stores throughout the United Kingdom, United States, Indonesia, Austria, Denmark, Russia, the Republ ...

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

Accounting irregularities

In 2002 Baugur's headquarters were the subject of a police raid. In July 2005 company founders

and

were charged on 40 counts including tax and accounting irregularities, fraud and embezzlement. Jón Ásgeir Jóhannesson has accused the then prime minister,

Davíð Oddsson Davíð Oddsson (pronounced ; born 17 January 1948) is an Icelandic politician, and the longest-serving prime minister of Iceland, in office from 1991 to 2004. From 2004 to 2005 he served as foreign minister. Previously, he was Mayor of Reykjav ...

of orchestrating a vendetta against him. The case became known in Icelandic as the 'Baugsmálið' ('Baugur case'). On 3 May 2007, Johannesson was found guilty on a single charge of a breach of book-keeping rules, with the conviction being upheld on appeal on 6 June 2008. Johannesson was given a 3-month suspended prison sentence. It also left his position as chairman uncertain under Icelandic law because the conviction meant that he could not serve on any company board for 3 years. As a consequence of this, and the fact that much of Baugur's portfolio was now based in the UK, in July 2008 Baugur considered relocating to the UK, where Johannesson could keep his board position.

Demise and collapse

It emerged in October 2008 that BDO Stoy Hayward was advising Baugur on restructuring and that

Philip Green Sir Philip Nigel Ross Green (born 15 March 1952) is a British businessman who was the chairman of the retail company the Arcadia Group. He owned the high street clothing retailers Topshop, Topman and Miss Selfridge from 2002 to 2020. As of Ma ...

, the owner of Bhs and the

had travelled to Iceland for negotiations regarding him making an investment in Baugur, amid reports the group was on the brink of collapse On 4 February 2009, Baugur applied for protection from its creditors after restructuring negotiations with

broke down. The bank also applied for Baugur's UK arm to be put into

Ownership and links to Russia

In December 2002 ''Gaumur Holding'' acquired a 30.97% stake in Baugur Group. Luxembourg-registered Gaumur Holding was originally ''Compagnie Financiere pour l'Atlantique du Nord''. The company was registered on 22 June 1998. In March 2000 changed its name to ''Gaumur Holding''.. Another copy: . An automatic translation: Official records show that Gaumur Group had three shareholders: * ''Starbook International Limited'' (P.O. Box 3186 Road Town, Tortola, British Virgin Islands) * ''Waverton Group Limited'' (P.O. Box 3186 Road Town, Tortola, British Virgin Islands) * ''Birefield Holdings Limited'' (P.O. Box 3186 Road Town, Tortola, British Virgin Islands) In 2005 Danish media reported that behind Starbook, Waverton and Birefield is Shapburg Limited (registered in the same mailbox 3186) and Quenon Investments Limited (registered in the same mailbox 3186). It was discovered that: * Both companies owned a stake in Baugur Group. * Both companies owned a stake in the Luxembourg-registered ''Compagnie Financiere Scandinave''. A month after incorporation it was renamed the ''Scandinavian Holding'' and later '' Meidur S.A.'' (later Exista). * Both companies owned a stake in ''Alrosa Finance'' in Luxembourg. Another shareholder was Russian state-owned diamond company ALROSA. * Shapburg Limited owned a stake in ''Alfa Finance Holdings''. Another shareholder was

Alfa-Bank ALFA-BANK JSC (Alfa-Bank), is the largest of the private banks in Russia. It was founded in 1990 by Russian businessman Mikhail Fridman, who is still the controlling owner today. Headquartered in Moscow, it operates in seven countries, providi ...

of Russia. Icelandic businessmen

Björgólfur Thor Björgólfsson Björgólfur Thor Björgólfsson (born 19 March 1967), known internationally as Thor Bjorgolfsson, and colloquially in Iceland as Bjöggi, is an Icelandic businessman and entrepreneur. He is also chairman and founder of Novator Partners. Björg ...

Björgólfur Guðmundsson Björgólfur Guðmundsson (born 2 January 1941) is an Icelandic businessman and former chairman and owner of West Ham United. Björgólfur was Iceland's second wealthiest businessman worth more than a billion dollars — his son, Björgólfur T ...

and Magnús Þorsteinsson all came to London from Saint Petersburg, Russia where they did business in the beverage sector together.

Former assets

365 365 may refer to: * 365 (number), an integer * a common year, consisting of 365 calendar days * AD 365, a year of the Julian calendar * 365 BC, a year of the 4th century BC Media outlets * 365 (media corporation), Icelandic TV company * 365 Med ...

- sold April 2008 * Arcticgroup * Aurum **

Mappin & Webb Mappin & Webb (M&W) is an international jewellery company headquartered in England. Mappin & Webb traces its origins to a silver workshop founded in Sheffield . It now has retail stores throughout the UK. Mappin & Webb has held Royal Warrants ...

Watches of Switzerland Watches of Switzerland is a British retailer of Swiss watches, with 16 stores in the United Kingdom. The company headquarters is in Braunstone, England. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index. Histo ...

Booker Group Booker Group Limited is a British food wholesale operator and subsidiary of Tesco. In January 2017, it was announced that the British multinational supermarket retailer Tesco had agreed to purchase the company for £3.7 billion. It was confirm ...

- sold June 2008. * Scandinavian Design & Retail * Steinunn *

Matthew Williamson Matthew Williamson (born 23 October 1971) is an interior designer known for his use of bold, colourful and carefully constructed designs. Early years Matthew Williamson was born in Manchester and studied in Loreto College until he was 17 years ...

* Day Birger et Mikkelsen * Souk * eCommera * Saks *

French Connection The French Connection was a scheme through which heroin was smuggled from Indochina through Turkey to France and then to the United States and Canada, sometimes through Cuba. The operation started in the 1930s, reached its peak in the 1960s, and ...

supermarket * Wyevale Garden Centres *

Magasin du Nord Magasin is a Danish chain of department stores. It has seven department stores with its flagship store located on Kongens Nytorv in Copenhagen. The company is a subsidiary of the German department store retailer Peek & Cloppenburg Düsseldorf, Ma ...

''department store'' (83% with Straumur Investment Bank and B2B Holdings) * Visual Communications Group * Illum ''department store'' * Jane Norman - bought 29 July 2007 for £117m; filed for bankruptcy administration 27 June 2011 *

- sold to

Holland & Barrett Holland & Barrett (H&B) is a multinational chain of health food shops with over 1,300 stores in 16 countries, including a substantial presence in the United Kingdom, Republic of Ireland, Netherlands, Belgium, Mainland China, Hong Kong, India, ...

in September 2008. * All Saints *

(13%) *

Hagar Hagar, of uncertain origin; ar, هَاجَر, Hājar; grc, Ἁγάρ, Hagár; la, Agar is a biblical woman. According to the Book of Genesis, she was an Egyptian slave, a handmaiden of Sarah (then known as ''Sarai''), whom Sarah gave to h ...

- sold back to Johannesson family in July 2008. * House of Fraser - (35%) *

FL Group Stodir ( is, Stoðir, FL Group prior to 4 June 2008) is a majority family-owned investment company located in Reykjavík, Reykjavík, Iceland. The company was founded on July 20, 1973, under the name Flugleiðir. It was formed as a holding compa ...

- sold April 2008 * Hjálmur - sold April 2008 * Humac - sold April 2008 * Merlin - sold to Árdegi in June 2007. *

MK One MK One was a British fashion retailer. History Beginnings as Mark One The company was founded in the 1980s by Mark Brafman, Les Lucy and Alan Simons as Mark One, and became a discount womenswear retailer. In February 1996, Mark One was bou ...

- sold to restructuring specialist Hilco in May 2008. *

Moss Bros Moss Bros Group is a limited company set up in 1851 by Moses Moss in Covent Garden, London, UK. One of the UK's top menswear shops, specialising in dress wear for formal occasions, Moss Bros has over 150 shops throughout the United Kingdo ...

- Baugur sold its 28.5% shareholding sold to

in November 2008 *

Mosaic Fashions Mosaic Fashions hf was the company of several fashion brands. The company has 1,760 stores and concessions in the UK, Europe and the USA, 234 Franchise stores in 44 countries and 93 joint venture stores including 84 concessions in China. Histor ...

(49%) (entered administration on 2 March 2009) * Newsedge - sold April 2008 * Saga Film - sold April 2008 *

(3%) -

The Co-operative Group Co-operative Group Limited, trading as Co-op, is a British consumer co-operative with a group of retail businesses including food retail, wholesale, e-pharmacy, insurance and legal services, and funeral care. The Co-operative Group has over ...

bought the entire Somerfield chain in July 2008. Baugur made an unsuccessful attempt to buy Somerfield in 2005 * Teymi - sold April 2008 *

Woolworths Group plc Woolworth (officially Woolworths Group PLC) was a listed British company that owned the High Street retail chain Woolworths. It also owned other companies such as the entertainment distributor Entertainment UK, and book and resource distrib ...

(12.4%). Share trading suspended 26 November 2008, with retail chain Woolworths and distribution arm Entertainment UK being placed into

. * Whistles - Sold to Jane Shepherdson in January 2008 *

Whittard of Chelsea Whittard of Chelsea is a British chain of shops selling coffee, tea and related products. It was started by Walter Whittard in 1886, and remained in his family until 1973. In 1996 it was floated on the Alternative Investment Market, and expande ...

- Placed into

on 23 December 2008, and subsequently sold to

EPIC private equity Epic commonly refers to: * Epic poetry, a long narrative poem celebrating heroic deeds and events significant to a culture or nation * Epic film, a genre of film with heroic elements Epic or EPIC may also refer to: Arts, entertainment, and med ...

. * Woodward Foodservice - Sold to

Brake Bros Ltd Brakes (previously known as ‘Brake Bros Ltd’) is a food and distribution company supplying food, drink and other products mainly to the catering industry in the UK through more than 20 distribution centres. It provides delivered wholesale ...

in August 2008 * Wyndeham Press Group - Sold to Walstead Investments Limited in December 2008.

Board of directors

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

References

External links

Baugur's home page

''Ekstrabladet'' article on Russian connections
{dead link, date=October 2016 , bot=InternetArchiveBot , fix-attempted=yes

* ttp://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 Financial services companies of Iceland House of Fraser Financial services companies established in 1998 1998 establishments in Iceland