By James Davey and Anjuli Davies
LONDON Dec 4 (Reuters) - British retail billionaire Philip Green is in advanced talks with a U.S. private equity firm over the sale of a 25 percent stake in high street chain Topshop and Topman, a source familiar with the matter told Reuters.
Earlier on Tuesday, Sky News reported that Los Angeles, California-based Leonard Green & Partners LP was in talks to buy a stake in Topshop and Topman, valuing the two chains at close to 1 billion pounds ($1.61 billion).
The stake would be ringfenced from Philip Green's larger Arcadia Group, which includes high street names such as BHS, Burton and Miss Selfridge. An announcement could come as soon as Thursday, the source told Reuters.
Philip Green declined to comment while Leonard Green did not respond to a request for comment.
Leonard Green is the owner of U.S. retailer J Crew alongside private equity titan TPG Capital LP. TPG and Leonard Green bought J Crew in 2010 in a deal valued at about $3 billion.
British retailers are mostly struggling as consumers hold back spending in the face of job insecurity, rising prices, subdued wage growth and government austerity measures.
Arcadia posted a 25 percent year-on-year rise in underlying profit to 166.9 million pounds ($269 million) in the year to August 25.
Arcadia's total sales from about 2,500 UK stores and 615 franchised outlets in 39 countries were flat at 2.68 billion pounds.
Monaco-based Philip Green, who was knighted in 2006, bought department store chain BHS for 200 million pounds in 2000, Arcadia for 850 million pounds in 2002 and has twice tried and failed to buy Marks & Spencer.
In an interview with Reuters in November he said he was not averse to doing another major deal if the right one crossed his table.
Green's family ranked 17th on the 2012 Sunday Times UK rich list with an estimated fortune of 3.3 billion pounds.