Hats off to Baugur's retail leaders

Barely a day has passed this week that hasn’t seen a further dismantling of the Icelandic house of cards.

The leaders of Baugur's UK retail businesses have been taken aback by the speed and magnitude of the Icelandic empire's downfall but have acted fast to safeguard their individual chains' futures.

Potential buyers of Baugur’s£2 billion debt and assets once controlled by now-defunct Icelandic banks are struggling to contend with cooling Anglo-Icelandic relations and confusion over who controls those stakes.

Spare a thought, then, for the 55,000 employees on the ground at Baugur’s UK business.

Baugur chief Jón sgeir Jóhannesson’s watershed admission in Reykjavik on Sunday that Baugur had hit choppy waters heralded the beginning of the end of an era in UK retail and threw the future of thousands of retail staff into jeopardy.

But it also became the catalyst for its portfolio of retailers, headed by management teams that read like a list of who’s who in retail, to act independently to secure those futures. They are currently moving mountains to finalise contingency plans should the ownership structure be forced to change.

The management of Mosaic and House of Fraser – along with, it is understood, Jane Norman and Whistles – are moving swiftly to find buyers and backing, underlining their confidence in their businesses.

Sir Philip Green is lobbying UK government officials to support his bid for Baugur’s debt.

Green, Mosaic chief executive Derek Lovelock and House of Fraser chairman and Baugur shareholder Don McCarthy have all echoed the same sentiment this week; that it would be disastrous for the retail industry for some of the UK’s most famous high street names to fall by the wayside as the sector faces one of the toughest trading periods in history. Imagine the effect on the high street generally of boarded-up shops and closing down Sales during the golden quarter.

For the sake of their staff if nothing else, House of Fraser and Mosaic are two of many Baugur-backed retailers that have distanced themselves this week from the impending sense of doom.

They need to maintain where possible an even keel and continue to offer the service and product their customers demand as they face one of the toughest Christmases on record. And it is likely that many fashion retailers affected will face it with their futures assured.

There is little doubt that McCarthy and his shareholders could mount their own buy-out of House of Fraser and that Mosaic’s portfolio carries a few jewels in its crown, including Karen Millen. Whistles and Jane Norman both offer scale and good management teams, including retail star Whistles’ Jane Shepherdson.

In tumultuous times, the retailers running Baugur-backed chains and the investors willing to ride to the rescue should be praised for working swiftly and tirelessly to smooth the inevitable transformation and secure the futures of the people who work there.