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Kevin Stanford, head and shoulders
Fashion tycoon Kevin Stanford hopes to reclaim stakes in House of Fraser, designer Mulberry, wholesale group Booker, and mining firms Kirkland Lake, Rambler and Belvedere. Photograph: Rex Features
Fashion tycoon Kevin Stanford hopes to reclaim stakes in House of Fraser, designer Mulberry, wholesale group Booker, and mining firms Kirkland Lake, Rambler and Belvedere. Photograph: Rex Features

Fashion tycoon Kevin Stanford plans House of Fraser comeback

This article is more than 11 years old
Kevin Stanford to return to Highland Group board in effort to reclaim stakes in firms lost in 2008 Icelandic banking crash

Kevin Stanford, the embattled but irrepressible high street fashion tycoon, is stepping up his fightback against creditors by returning to the board of Highland Group, the company behind House of Fraser. The retail tycoon's return to the board of Highland marks a firm signal of his determination to pursue one last attempt to reclaim his once vast investment empire, valued he says at more than £700m.

Insisting he was deceived by bosses at the failed Kaupthing bank, Stanford believes he can lawfully reclaim stakes in House of Fraser, designer Mulberry, wholesale group Booker, and mining firms Kirkland Lake, Rambler and Belvedere.

He took a 10% stake in Highland when it was taken private in 2006 by a consortium led by Icelandic tycoon Jon Asgeir Johannesson's Baugur group, in which Stanford also held an 8% stake. Among other co-investors were Tom Hunter and Don McCarthy, the latter becoming House of Fraser executive chairman.

Two years later, however, Stanford appeared to lose control of this and many other investments in the 2008 Icelandic banking crash; he was the fourth largest shareholder in Kaupthing, Iceland's biggest bank, and the largest non-family shareholder in Baugur. In the end, these huge investments proved worthless.

After the crash Stanford fought a bitter court battle over shares in his All Saints chain, another joint venture with Baugur, but eventually lost to Kaupthing administrators. At the hearing it emerged that the bank claimed to be owed more than £250m by Stanford personally. Undeterred, last year he persuaded a US private equity house, Lion Capital, to buy up shares he lost to Kaupthing as well as those forfeited by equally bust Baugur. He remains at the helm of the business today.

Previously it was thought that Stanford had accepted, after losing the battle for All Saints, that a basket of collateral he had pledged to Kaupthing had been lost to the bank's creditors; he resigned from the board of Highland in May last year, having not attended board meetings for several years, which was taken as an indication he had thrown in the towel.

But Stanford has now told friends he believes a legal claim being brought in Luxembourg will clarify that he remains the rightful owner of this stake and others, and he only stepped down from the board to help House of Fraser avoid distractions while refinancing. Last year, in a leaked letter, Stanford's lawyers claimed Kaupthing, before its failure, operated an unlawful share support scheme "specifically designed to create a false market in shares for Kaupthing". Stanford, they said, had been unwittingly used in the alleged conspiracy.

It is thought McCarthy would like to welcome back Stanford to the boardroom, though any lengthy row with Kaupthing risks being a headache for the group.

Stakes in Highland held by Baugur and another Johanesson-linked Icelandic investment vehicle, FL Group, in which Stanford also held an interest, have passed to the estates of two other Icelandic banks, Landsbanki and Glitnir.

Administrators to the banks ultimately want to sell, but have been supportive of McCarthy. Stanford nevertheless has told friends he is concerned about the banks' motivation and wants to "protect" the business. His fightback mirrors that of his ex-wife, designer Karen Millen, revealed by the Guardian last month.

Filings for Mulberry show the 24.7% stake owned by Stanford has passed to Banque Havilland, the renamed Kaupthing Luxembourg. He believes Kaupthing has failed to explain how this has happened.

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