Thai investor set to take control of Selfridges Group

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Thai investor Central Group is set to take control of the company behind London’s upmarket department store Selfridges, amid a financial crisis at its Austrian co-owner Signa.

Central Group, owned by the Chirathivat family, on Tuesday said it will become the majority owner of Selfridges Group — which also includes retailers De Bijenkorf in the Netherlands, as well as Brown Thomas and Arnotts in Ireland — after it converted a loan into equity. Central and Signa bought the group for £4bn almost two years ago.

The outcome comes after the pair earlier this year replaced a €354mn loan from Julius Baer, the Swiss bank, with a short-term shareholder loan of €364mn at the end of August.

Signa declined to comment on what Central Group’s takeover means for Signa’s future, or the other retail businesses it co-owns with the Thai company. Signa is currently a minority shareholder and Central declined to comment on the size of its own stake.

Central Group said: “The move solidifies Central Group as an owner-operator of the largest European luxury department store group offering customers the best curation of brands, merchandise, and extraordinary experiences.”

Signa was founded by Austrian developer René Benko, 46, in 2000, and has grown to become one of central Europe’s most prominent property investors. Benko’s relationship with Central, which began when he sold a stake in his ownership of Berlin’s flagship luxury department store, KaDeWe to it in 2015, has been one of the most consequential for Signa of the past decade.

Together they also own Munich’s most prestigious department store, Oberpollinger, Hamburg’s premier venue the Alsterhaus, and the Swiss chain of luxury department stores, Globus. 

The two are also in the throes of building what they hope will become Vienna’s new destination luxury store, Lamarr — named after the Austrian-born Hollywood actress, Hedy Lamarr.

Signa’s financial difficulties has cast doubt over the future of all the venues.

For more than a year, Signa has struggled to raise urgently needed fresh capital, in order to finish projects and service its increasingly burdensome debt obligations.

Rising interest rates, falling commercial property values and a downturn in the luxury market have combined in a perfect storm for the sprawling Austrian property empire.

Its highly opaque, complicated ownership structure — controlled via a series of trusts by Benko until he agreed to relinquish his role as part of a restructuring last week — has added to market fears about the group’s financial safety.

An analysis by JPMorgan on Tuesday estimates Signa owes European banks and other entities — which include its own investors — more than €13bn.

The scale and complexity of lending to the group is such that the European Central Bank has singled it out for special attention, and required European banks to buffer against potential losses from it.