In shattering many an LBO investor's dreams, who had been waiting and waiting for Baugur to buy luxury retailer Saks (another company that could make headlines here in the not too distant future), the Icelandic retail roll-up will not be LBOing anyone any time soon, as today it finally caved and filed for bankruptcy. Baugur, whose investments include London toy-store Hamley's and a partial stake in Debenhams and Saks, has disclosed debts which exceed its assets by $1.3 billion. In the words of Baugur Chairman Kristin Johannedottir "we have no choice but to file for bankruptcy." Nice and to the point.
It was only a matter of time before Baugur had to file for bankruptcy as its two-fold strategy of not only LBOing businesses, but relying on cheap money from the now bankrupt Iceland economy, came crashing down with the burst of the credit bubble.
When it came to turning the light outs, in true polite Icelandic fashion the company said that its board “would like to express gratitude to the employees and everyone else the company has had
the pleasure of working with in recent years.”
Once can only hope the wave of U.S. bankruptcies will crash as gracefully.
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