Mixed News For Selfridges

Saudi Arabia’s Public Investment Fund (PIF) has signed a deal to buy 40% of Selfridges Group for an undisclosed sum.

This was the stake previously owned by Austrian company Signa Group, which filed for ‘self-administered restructuring’ in the Austrian courts in November 2023, and led to the downfall of WiggleCRC, the sports retailer, amongst others.

The remaining 60% is owned by Central Group, a Thai conglomerate, which bought Selfridges for £4bn in 2021 from the Weston family. It has been said that the new partnership will aim to “accelerate growth” and “unlock further value in Selfridges”. The Weston family put it up for sale after the death of W Galen Weston in 2021. The Westons still own Primark and Fortnum & Mason (which is probably as diverse a range of stores as you can get).

Selfridges has been named the best department store in the world four times.

Perhaps riding on that name, the Thai and Austrian former-owners loaded the company with more than £1.7bn of debt. This forced redundancies at head office and in some stores to improve efficiency.

It has also emerged that the value of Selfridges’ property portfolio was slashed by more than half a billion pounds last year. Their property holding company shows that its £3.1bn of assets were marked down by valuers by £639m. The aforementioned £1.7bn of loans are secured against their freehold property.

Despite a downturn in the department store and luxury sector, Selfridges has outperformed the market. Their Chief Executive recently left the business, and is being replaced by Andre Maeder, formerly of the German KaDeWe department store, which was also owned by Signa.

It is believed that PIF have £550bn of assets, driven by their oil wealth. They already own Newcastle United, 20% of Aston Martin, 3% of Uber and 8% of Saudi Aramco, and a stake in Heathrow Airport. The fund is controlled by crown prince Mohammed bin Salman.