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Future of UK high street giants uncertain

The future of well-known high-street names such as Oasis, Coast and House of Fraser is uncertain today with the announcement that parent company Baugur has requested bankruptcy protection as it looks to reorganise its assets. The legal move back in Iceland is similar to the British situation of administration and has alerted many investors to the possibility that these well-known names of the UK high-street may be for sale.

The group also has exposure to Karen Millen, The Shoe Studio and Warehouse and many believe the company is paying the price for a very aggressive acquisition strategy over the last decade which saw the company's finances pushed to the limit and collapse in the wake of the Icelandic economic crisis. While there is confusion about the future of the above companies, experts believe there is little risk to jobs with the likelihood that other investors will step forward to take on these assets.

Rather bizarrely, Baugur has reported a very buoyant Christmas trading period which has attracted the attention of retail entrepreneurs such as Sir Philip Green and Jon Molton, the head of private equity house Alchemy, who have a reputation for picking up distressed assets. The situation should become clearer over the coming days and weeks and it is likely that ownership of many of some of the U.K.'s leading retail chains will change hands.

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