Sir Philip Green has sold 25 per cent stake in his Topshop and Topman business for a larger than expected £500 million to a US private-equity firm.

The latest deal with Leonard Green & Partners (LGP) valued Topshop and Topman businesses at a staggering £2 billion. The deal will enable accelerated expansion of the two retail chains in US, Asia and several other regions.

Sir Philip indicated that the company is now planning to focus on overseas for growth amid a slowdown in consumer spending in the UK. He had acquired Arcadia for £850 million in
2002 largely with debt, which he will now be able to pay back. Arcadia owns major brands including Wallis, Evans, Dorothy Perkins, Outfit and Burton.

He announced that Arcadia is now debt free and added there are enough resources to grow and expand the company in new markets for growth. Arcadia had a £308.9m of bank debt as of August this year with the repayment of debt, the company will make significant savings in interest costs.

Topshop, which is aimed at budget shoppers, has expanded its international presence recently and it now runs 615 franchised shops across 39 countries. Sir Philip said that it is very exciting time for Arcadia Group and pointed out that company has the plans in place to turn Topshop/Topman in major global brands.