The new owners of Selfridges are planning to develop a luxury hotel and serviced apartments as part of a renewal of the brand’s flagship Oxford Street store, according to a top executive at Austrian real estate group Signa, who joined Thai retailer Central Group in the $ 4bn bid. . .
Signa and Central, which already own the German and Swiss luxury stores KaDeWe and Globus, will also upgrade Selfridges’ food hall following their purchase of the British brand from the Weston family, Signa’s director Dieter Berninghaus told the Financial Times.
“We are planning to swap up the Food Hall of Selfridges,” Berninghaus said. “It’s one of our core competencies we have in the group, in KaDeWe and in Globus: we run the world’s best delicatessen.”
Part of Selfridges’ property on Oxford Street has been empty since 2008, when the old Selfridges Hotel was closed.
Development of the hotel and apartments would mean “significant upward value potential” for Selfridges’ new owners, Berninghaus said. “The purchase price only reflects the valuation of Selfridge’s main building and its retail utilization,” he added.
One industry person expressed confidence in the plans. Peter Williams, a former CEO of Selfridges and chairman of retailer Mister Spex, said: “The food hall is frankly underutilized and the hotel has been empty for over a decade, so it’s definitely an option.”
Signa and Central’s planned takeover of Selfridges ‘stores in the UK, Ireland and the Netherlands will give the combined groups’ luxury department stores an expected annual turnover of more than € 7 billion. in 2024, compared to € 5 billion. in 2019.
The marriage between Signa’s real estate knowledge and Central’s retail knowledge had been “an unusual combination, but also very complementary”, said a person who knows both groups.
The partnership goes back to Signa’s acquisition in 2014 of KaDeWe in Berlin and other top stores Alsterhaus in Hamburg and Oberpollinger in Munich, whose activities it took over as part of the insolvent retail group Karstadt.
After designing the luxury stores to form a KaDeWe group, Signa’s leaders, led by founder René Benko, needed a partner in Europe who knew how to run premium retail, thinking of France’s Galeries Lafayette and Italy’s Rinascente.
Central, owned by Bangkok’s Chirathivat family, had bought Rinascente in 2011. They then installed family members in management along with Vittorio Radice, a former Selfridges chief executive who oversaw a transformation of the company when he ran it in 1996-2003 and today acts as Central’s. CEO of Europe.
Central operates many of Thailand’s most exclusive shops and malls and was a pioneer in integrating food and beverage with retail, as well as recognizing – and catering to – luxury retail as a global phenomenon.
According to a person familiar with Central’s thinking, the group was looking for a partner with a longer perspective than private equity investors. Central did not respond to a request for interview.
Signa’s leaders knew Radice and through him made contact with the Chirathivates. In 2015, the Austrians sold 50.1 percent of the KaDeWe business to Central and retained ownership of the property.
On Globus and Selfridges’ acquisitions, the management and the property’s ownership are evenly distributed.
The partners have invested more than € 600 million. in KaDeWe, complete renovation and remodeling of the German stores. They brought in luxury brands like Louis Vuitton, Dior and Balenciaga and put a lot of pressure on online retail. At Globus, they installed a rooftop restaurant in its flagship store and built a brand new store in Bern.
Relations between their stock families have grown. Before the pandemic, the chirathivates and their European partners met four times a year, alternating between Asia and Europe, and after business meetings with a day of socializing with family members. “We are a very professional partnership, but we are also in a very close friendship, strongly based on the same values,” Berninghaus said.
The Selfridges deal comes at an unusually tough time for retail, where the pandemic and challenges of online shopping have raised questions about whether groups like Signa can continue to borrow and invest in anticipation of rising valuations.
Separately, Benko was recently one of 12 people mentioned in an Austrian criminal indictment over a corruption scandal involving Green Party politician Christoph Chorherr, in which prosecutors claim donations to a charity were swapped for political services. Chorherr and Benko, through a spokesman, have denied having made any mistakes, saying the donations were not related to any business.
The Selfridges acquisition, which is subject to antitrust approvals in the EU and the UK, will bring Signa and media cloud Central further in the international spotlight.
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