New Selfridges owners plan luxury hotel in London flagship store
The new owners of Selfridges plan to develop luxury hotel and serviced apartments as part of an overhaul of the brand’s flagship store on Oxford Street, according to a senior executive at Austrian real estate group Signa, who has joined the retailer. Thai Central Group in connection with the £ 4 billion offer. .
Signa and Central, which already own German and Swiss luxury stores KaDeWe and Globus, will also modernize Selfridges’ dining room after purchasing the British brand from the Weston family, Signa executive chairman Dieter Berninghaus told Financial Times.
“We are planning to exchange the Selfridges food hall,” said Berninghaus. “This is one of our core competencies within the group, KaDeWe and Globus: we operate the best delicatessen company in the world. “
Part of Selfridges’ Oxford Street property has been empty since 2008 when the old Selfridges hotel closed.
Developing the hotel and apartments would mean “significant upside potential” for the new owners of Selfridges, said Berninghaus. “The purchase price simply reflects the valuation of the main Selfridges building and its commercial use,” he added.
An industry figure expressed confidence in the plans. Peter Williams, former Managing Director of Selfridges and President of retailer Mister Spex, said: “The food hall is frankly under-utilized and the hotel has been empty for over a decade so this is definitely an opportunity.
Signa and Central’s planned takeover of Selfridges stores in the UK, Ireland and the Netherlands will give combined group luxury department stores an expected annual turnover of over € 7 billion by 2024 , compared to 5 billion euros in 2019.
The marriage of Signa’s real estate knowledge and Central’s business know-how had been “an unusual combination, but also very complementary,” said a person familiar with the two groups.
The partnership dates back to Signa’s 2014 acquisition of KaDeWe in Berlin and other high-end stores Alsterhaus in Hamburg and Oberpollinger in Munich, whose operations it collected as part of the insolvent retail group Karstadt.
After having cut the luxury stores to form a KaDeWe group, the leaders of Signa, led by the founder René Benko, needed a partner in Europe who knew how to manage premium distribution, and thought of Galeries Lafayette in France and of the Italian Rinascente.
Central, owned by the Chirathivat family of Bangkok, had purchased Rinascente in 2011. They installed family members in management alongside Vittorio Radice, a former Managing Director of Selfridges who oversaw a transformation of the business when he was in charge of it in 1996-2003. He is now Managing Director of Central for Europe.
Central operates many of Thailand’s most upscale stores and malls, and has been a pioneer in integrating food and beverage into retail, as well as the retail recognition and catering of luxury as a global phenomenon.
According to someone familiar with Central’s thinking, the group was looking for a partner with a longer-term perspective than private investors. Central did not respond to an interview request.
Signa’s rulers knew Radice and, through him, made contact with the Chirathivats. In 2015, the Austrians sold 50.1% of the KaDeWe business to Central, retaining ownership of the real estate.
On the acquisitions of Globus and Selfridges, management and property ownership are split equally.
The partners have invested more than 600 million euros in KaDeWe, completely renovating and remodeling German stores. They introduced luxury brands such as Louis Vuitton, Dior, and Balenciaga, and dove heavily into online retailing. At Globus, they installed a rooftop restaurant in its flagship store and built a brand new store in Bern.
The ties between their shareholder families have grown. Before the pandemic, the Chirathivats and their European partners met four times a year, alternating between Asia and Europe and after business meetings with a day of conviviality with family members. “We are a very professional partnership, but we are also in a very close friendship strongly based on the same values,” said Berninghaus.
The Selfridges deal comes at an unusually difficult time for the retail industry, when the coronavirus pandemic and online shopping challenges raised questions about whether groups like Signa can continue to borrow and invest. pending an increase in valuations.
Separately, Benko was recently one of 12 people named in an Austrian indictment relating to a corruption scandal involving Green Party politician Christoph Chorherr, in which prosecutors say charitable donations were exchanged for political favors.
Chorherr and Benko, through a spokesperson, denied the wrongdoing and said the donations were not related to any business.
The takeover of Selfridges, which is subject to antitrust approvals in the EU and UK, will put Signa and Central even more in the international spotlight.
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