Central Group partners with the Saudi wealth fund which has secured a 40% stake in Selfridges. The luxury retailer operates 18 stores, including London’s iconic Oxford Street location. This deal comes after Signa’s collapse, aiming to strengthen Selfridges’ financial future.
On Monday evening, a statement from Central Group, Thailand’s leading retail operator, confirmed that the Saudi Arabian Public Investment Fund, the sovereign wealth fund of Saudi Arabia, is to become its partner in the UK-headquartered department store Selfridges. The move consolidates the position of the Chirathivat family, who took over the international chain in November. Selfridges operates luxury retail stores in the United Kingdom, Ireland, and Europe, particularly the Netherlands. This includes the iconic Selfridges store in London, which opened in 1908 and is still considered a mecca for shoppers worldwide.
The Saudi Arabian Public Investment Fund (PIF) has partnered with Thailand’s Central Group. At length, the PIF has secured a 40% stake in the UK department store chain Selfridges. Central Group will retain the remaining 60%.
In brief, this partnership aims at stabilising and growing the luxury retailer. It comes following the collapse of its former partner, Signa Group. Central Group, controlled by the Chirathivat family, later confirmed the deal in a statement.
Certainly, the partnership involves both the property and operating businesses of Selfridges. Furthermore, the agreement also includes new investments from both shareholders. Undoubtedly, these investments will help strengthen the financial position of the department store group.
Selfridges’ future reshaped after Central’s former partner, Signa, faced financial collapse in real estate
Before Monday’s announcement, the group had been negotiating the financial collapse of Central’s previous partner, Signa. Signa is a real estate and retail company founded by Austrian tycoon René Benko.
In short, Signa’s insolvency was triggered by a downturn in the commercial property sector. This left Central looking for new partners to secure Selfridges’ future. PIF has been expanding its international investments in recent years.
“We are pleased to be partnering with Central Group in Selfridges Group, one of Europe’s most iconic luxury department stores,” said Turqi Al-Nowaiser, PIF’s deputy governor and head of international investments. “This transaction allows Selfridges Group to build on its position as a premier retail destination.”
Previously, the collapse of Signa led to a reshuffling of many of its luxury retail assets. Central Group had already moved to take control of other investments previously tied to its joint ventures with Signa.
This includes Swiss luxury department store chain Globus and Berlin’s KaDeWe flagship store. While the financial terms of the deal were not disclosed, the agreement marks a significant change for Selfridges Group. Selfridges operates 18 department stores across three countries.
These include the flagship Selfridges store on Oxford Street in London, De Bijenkorf in the Netherlands, and Brown Thomas and Arnotts in Ireland.
Central sought new partner after Signa’s collapse due to rising interest rates and market downturn
Signa’s financial troubles were driven by rising interest rates and falling property values. This prompted the Central Group to seek new ways to secure its European investments. Meanwhile, Central’s executive chair and CEO, Tos Chirathivat, emphasises the importance of the partnership with PIF.
He stated that the deal would “immensely strengthen” Selfridges’ financial standing and pave the way for future growth. Founded by René Benko in 2000, Signa grew to become a leading property investor in central Europe.
At length, it managed a large portfolio of commercial and luxury real estate assets, including high-profile department stores. However, the group’s rapid expansion left it vulnerable to economic shifts.
The recent rise in interest rates and a downturn in the luxury retail market hit Signa hard. Consequently, by late 2023, the company was undergoing insolvency proceedings in Austria.
Billions of euros were owed to shareholders and creditors. Signa’s collapse forced Central Group to restructure its luxury retail ventures and find new partners.
Founded in 1908, Selfridges remains a premier destination for luxury retail and global expansion
Selfridges was founded in 1908 by American retail magnate Harry Gordon Selfridge. Undeniably, it remains one of the most iconic names in British retail.
Its flagship store on Oxford Street is known for its luxury goods, cutting-edge fashion, and eye-catching window displays. Under Central Group’s ownership, Selfridges has expanded its presence across Europe.
In addition to its UK locations, the group operates high-end department stores in the Netherlands and Ireland. Despite challenges in the retail market, Selfridges continues to be a leading destination for luxury shopping.
In 2021, Central Group and Signa acquired Selfridges in a joint venture, which included a portfolio of premium department stores. However, Signa’s financial struggles raised questions about the future of the partnership. The new deal with PIF allows Central Group to maintain its expansion plans.
Central and PIF’s partnership aims to leverage Saudi Arabia’s growing interest in luxury markets globally
At the same time, it may see the group benefiting from Saudi Arabia’s growing interest in global luxury markets. The partnership between Central Group and the PIF represents a new chapter for Selfridges Group.
With the backing of Saudi Arabia’s sovereign wealth fund, the department store chain aims to strengthen its position.
Billionaire rivals eye dominance of the Kingdom’s 7-Eleven chain run by the Chearavanont family
In truth, that is as a world leader in luxury retailing. Both companies have expressed optimism about the long-term potential of the business.
Reportedly, they have plans to enhance Selfridges’ operations across its European locations. A spokesperson for Selfridges welcomed PIF as a new investor alongside Central Group. The spokesperson highlighted the potential for continued growth and innovation within the company.
Join the Thai News forum, follow Thai Examiner on Facebook here
Receive all our stories as they come out on Telegram here
Follow Thai Examiner here
Further reading:
Billionaire rivals eye dominance of the Kingdom’s 7-Eleven chain run by the Chearavanont family
Richest man in Thailand says COVID-19 is like a World War, the kingdom could end up a big loser
Drinks giant Thai Beverage to resume expansion with Singapore IPO for Asean regional beer operation
7 Eleven expands business in Thailand, with the economy looking up, it embraces change
