Debenhams and Sir Philip Green's Arcadia emerged last night as the favourites in the race for control of Principles, the Icelandic-backed fashion retailer.

Mosaic, the fashion group that is 49%-owned by Baugur, the Icelandic investment company, confirmed yesterday that it had received a number of approaches for Principles. Debenhams, the department store group, is interested in acquiring the brand so that it can reap the full margin from sales at Principles concessions in its stores, City and industry sources said.

Financial Times