A Thai investor, Central Group, is poised to acquire the London-based upmarket department store Selfridges. This comes amid a financial crisis for its Austrian coowner Signa.
Central Group, which is owned by the Chirathivat Family, announced on Tuesday that it would become the majority owner in Selfridges Group. This group includes De Bijenkorf, Brown Thomas, and Arnotts, retailers in Ireland, as well De Bijenkorf, in the Netherlands. Central and Signa purchased the group almost two years ago for £4bn.
The pair replaced an €354mn Julius Baer loan with a €364mn short-term shareholder’s loan at the end August this year.
Signa refused to comment on the implications of Central Group’s acquisition for Signa’s future or other retail businesses that it owns in partnership with the Thai firm. Signa is a minority investor and Central has declined to comment on its stake.
Central Group stated: “The move cements Central Group’s position as the owner-operator for the largest European luxury department stores group, offering customers the best curation, merchandise and extraordinary experiences.”
Signa, founded in 2000 by 46-year-old Austrian developer Rene Benko as a property investment company, has become one of the most important players in central Europe. Benko’s partnership with Central, which began in 2015 when he sold his stake in Berlin’s luxury department store KaDeWe, was one of Signa’s most significant relationships in the last decade.
They also own Oberpollinger in Munich, Hamburg’s Alsterhaus and Globus, a Swiss luxury department store chain.
They are also building Lamarr, a luxury boutique named after Hedy Lamarr, an Austrian-born Hollywood starlet.
Signa’s financial problems have cast doubt on the future of all venues.
Signa has been struggling to raise the urgently required fresh capital to complete projects and service their increasingly burdensome debt obligations for more than a full year.
The Austrian property industry is facing a perfect storm of rising interest rates, declining commercial property values, and a decline in the luxury market.
The group’s complex and opaque ownership structure — Benko controlled the trusts until he relinquished his position last week as part of a restructure — has heightened market concerns about its financial stability.
JPMorgan’s analysis of Signa on Tuesday estimated that Signa owes European bankers and other entities, including its own investors, more than €13bn.
The European Central Bank (ECB) has given the group special attention because of the scale and complexity. It also required European banks buffer against possible losses.