PHILIP GREEN is to bolster his Bhs chain by incorporating part of the UK arm of the Etam fashion group that he took over on Thursday night into his flagship store.

The entrepreneur intends to put Tammy Girl, Etam’s teen brand, into his fashion and homewares chain. Mr Green bought the Etam stores in a deal worth up to £10 million.

Monsoon, the fashion retailer hopes to buy up to 40 Etam shops from Mr Green, who is understood to be planning to sell up to 50 of the 209 stores.

Other interested parties include HMV, the entertainment retailer, which is understood to want up to ten stores and Uniqlo, the Japanese retailer, which also wants about ten sites.

It is thought that the rest of the stores will be converted into Mr Green’s Arcadia chains, which include Topshop, Dorothy Perkins and Miss Selfridge.

In February Mr Green bought ten Allders stores that he plans to convert into Bhs sites. Retail insiders have also speculated that he is interested in Littlewoods, the chain that is being auctioned by the Barclay brothers.

Retail insiders said that Mr Green had bought the licence to the Etam name in the UK for three years but it is thought that it will disappear from UK high streets before then.

The company employs 400 people at its head office which will probably be merged with Arcadia head office.

Mr Green said yesterday that he had not made firm plans for Etam but analysts said it was a strategic purchase that removed a major competitor of one of Dorothy Perkins.

Mr Green said: “We like Tammy, it has plenty of legs. We will take a proper look at Etam before we make a conclusion on what to do with that.

“What we are about is buying things at the right price with a view to what we can do for it. I am not a venture capitalist I’m into adventure capital.”

Etam Développement, Etam UK’s parent company, hired Cavendish Corporate Finance in January to sell the division.

Paul Herman, Cavendish’s director of retail, said: “The over-riding concern of our client was to sell the Etam business as a going concern to a party who was able to create value from the sizeable portfolio and best protect the key stakeholders in the business.”

Etam UK had net assets of £18 million and was losing more than £30 million a year.