Baugur will this week sell the Icelandic supermarket business that formed the foundation of its European retail empire when it confirms plans to relocate to the UK.

Jon Asgeir Johannesson, the Baugur executive chairman, is to acquire the Bonus chain founded nearly 20 years ago from the group as well as every other one of Baugur’s interests in its homeland through Gaumur, his private family company.

The move signifies a new era for Baugur, which traces its roots back to the Bonus supermarket set up in Rekjavik by Mr Johannesson and his father Johannes Jonsson after he left school.

It comes as Mr Johannesson faces the possibility of being banned as a company director in Iceland following the end of a six-year legal battle last month.

While Rekjavik’s Supreme Court threw out serious fraud and embezzlement charges against the entrepreneur, it upheld a three-month suspended prison sentence for book-keeping offences.

Baugur has been expected to redomicile out of Iceland and into the UK to keep Mr Johannesson on the board and take advantage of potential tax benefits.

International investors are also thought to questioned why Baugur, with 80 per cent of its assets in the UK, has maintained interests in its homeland at a time when it is eyeing expansion on a global stage.

Baugur executives have talked about wanting to develop chains such as Hamleys into Europe and the Middle East.

Baugur’s Icelandic interests are grouped in its Hagar subsidiary, which owns Bonus as well as Utilif, a sports store, shares in the largest supermarket chain in the Faroe Islands and a Topshop and Debenhams licence.

Analysts claim that if Mr Johannesson is banned as a company director in Iceland, a relative or his wife, Ingibjorg Palmadottir, could step into the breach.

Ms Palmadottir is herself the daughter of a small time grocer made big, an accomplished interior designer and businesswoman in her own right. Among her holdings are the Hotel 101 in Rekjavik, designed by her and popular with celebrities such as Harrison Ford and Jodie Foster.

The Johannesson family is said to be very bitter at the legal case pursued against Jon-Asgeir which they claim is politically motivated. Mr Johannesson was once described as a “street runt” by David Oddsson, Iceland’s former prime minister, and now central bank governor.

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