The iconic Selfridges department store has found itself at the center of a high-stakes corporate drama following the financial troubles of one of its principal shareholders, sparking interest from major international investors. The insolvency of Signa, an Austrian firm led by Rene Benko that owns half of Selfridges’ property company, has put its stake in the renowned retailer up for grabs, drawing the attention of Saudi Arabia’s Public Investment Fund (PIF) and Kering, the French luxury conglomerate behind brands like Gucci and Balenciaga.
Amidst the unraveling of Signa, Selfridges’ other co-owner, Thailand’s Central Group, is reportedly on the lookout for a new partner to ensure the store’s continued success. The PIF, which had previously played a behind-the-scenes financial role in the store’s operations, is now seen as a potential frontrunner in the race to claim Signa’s stake, which includes both the retail brand and its valuable real estate on London’s Oxford Street.
The PIF’s potential bid is part of a broader pattern of international investments that includes high-profile acquisitions like the purchase of Newcastle United FC. However, PIF’s aspirations might be challenged by Kering, which has been aggressively expanding its luxury retail footprint, including the recent purchase of a significant property on New York’s Fifth Avenue for its Gucci brand.
With the sale process still in preliminary stages, industry insiders describe Central Group as the pivotal player. Their decisions will likely shape the future of Selfridges as they navigate the complex aftermath of Signa’s demise. Observers expect that any formal expressions of interest will be on hold until the full implications of Signa’s insolvency are clear, with estimates valuing the stake at around £2 billion.
Selfridges, which was jointly bought by Signa and Central in a £4 billion deal in 2021, has operated independently of its shareholders’ issues. However, the retailer is not immune to the challenges faced by its co-owner. Central took control of the operating company by turning a significant loan into a majority stake amid Signa’s struggles. Nevertheless, Signa still retains a 50% share in the property company and approximately 35% in the operating company.
The retailer, for its part, has embarked on a cost-cutting mission, including significant job reductions, as it adapts to a shifting retail landscape and the financial impact of high interest rates. Despite these efforts, the last fiscal year saw Selfridges grappling with almost £40 million in losses, exacerbated by a spike in debt interest expenses.
As the situation unfolds, both Central Group and Kering have opted not to release any statements, while PIF has been approached for comment on the matter.