One of retail’s most colourful and controversial figures Jon Asgeir Johannesson is plotting his return to the UK retail after his fraud acquittal.
Last week the Reykjavík District Court acquitted former Baugur boss Jon Asgeir Johannesson of all charges in relation to fraudulently extracting money from Glitnir bank against the value of Aurum, the owner of jewellers including Goldsmiths and Mappin & Webb, opening up the way for his return to the UK retailing scene.
Following the ruling, Johannesson - the one time poster boy of Iceland’s apparently miracle economy – said: “I have always maintained my innocence and I now feel completely vindicated. With the case behind me, I now look forward to rebuilding my career as an investor in great retail businesses.”
That rebuilding is understood to include a strong desire to invest in UK retail. The 46-year-old believes that he retains good UK connections and the ability to attract and raise capital for investments on the UK high street.He had already used money from his wife to invest in Muddy Boots, a Worcestershire-based burgers specialist.
Accessing money was certainly not a problem the first time round. Having founded discount supermarket Baugur in Reykjavik with his father in 1989, the group expanded, acquired and became the platform for incursions into the UK, first in 2001 by buying a 20% stake in Arcadia and then over the next five years in a series of raids on the British high street.
An Icelandic investment vehicle on steroids, the company’s acquisitions included food retailer Iceland, department stores House of Fraser and Debenhams, toy store Hamleys and a string of fashion groups, plus stakes in Woolworths, Marks & Spencer, Sports Direct and French Connection.
An unabashed supporter of British retailing, Johannesson operated from a slick fifth floor head office on New Bond Street and at his peak he was worth an estimated £600m, ranked third on the Retail Week Power List and not only talked the part, but looked it too.
Young, shaggy-haired, confident and the epitome of Iceland’s go-getting, outward looking economy – he cultivated a self-ascribed image “more rock star than businessman” - he was eager to become a global player. Yet he and Baugur divided opinion from the outset: considered a model of either ambition or greed, calculated risk-taking or reckless borrowing.
Brash and confident, in 2007 Baugur threw a party for hundreds of staff in Monaco, with music by Tina Turner. Such extravagance also fostered resentment and, Johannesson believed, critics who began to gather within the corridors of power in Iceland.
Then, in what unfolded like a parable for the times, Baugur’s heavily leveraged retail juggernaut span out of control when restructuring talks with Landsbanki, its main creditor, collapsed in 2009. Baugur was placed into administration with £1bn of debts and over time the empire was disassembled. Meanwhile Johannesson became the focal point of a series of financial investigations at home, moves which he claimed were politically motivated.
A furious Johannesson said at the time: “This is a kick in the balls from Landsbanki and the result will be that the Brits will get some of the best companies owned by Icelanders at a very cheap price. I am sure that [Sir] Philip Green is now dancing in his living room because he will get many of our companies for next to nothing.”
A year later Glitnir filed a lawsuit in the US against Johannesson and six others, alleging that a “cabal of businessmen led by Jon Asgeir Johannesson, engaged in a sweeping conspiracy to wrest control of Iceland’s Glitnir Bank to fill their pockets and prop up their own failing companies”.
However, the case was thrown out after a judge decided it should not be tried in the US, because most of the key players were Icelanders and it revolved around the collapse of Icelandic banks. Last week’s acquittal concludes a separate £30m lawsuit filed by Glitnir in April 2010.
His exoneration has finally given Johannesson the chance to come out from the long shadow of Baugur’s collapse, with a promise that the Ice Man will cometh once again.