Selfridges seized by Thai retailer after debt crisis at co-owner

It ends weeks of uncertainty over ownership of the luxury department store

A Thai retailer has seized control of Selfridges after a key shareholder in the luxury department store was hit by a cash crunch.

Central Group said it has become Selfridges’ largest shareholder after converting a €364m (£317m) loan provided to the department store into equity.

The ownership of one of Britain’s best known retailers was plunged into doubt earlier this month after Signa investment group, which previously held a 50pc stake in Selfridges, became embroiled in financial turmoil.

Signa, which was founded by Rene Benko, the 46-year-old Austrian tycoon, also holds stakes in the Chrysler Building in New York and Berlin’s KaDeWe luxury department.

Selfridges was worth around £4bn when it was acquired by Signa and Central in 2021, suggesting Central’s stake has increased notably following the loan. Signa is expected to remain a significant minority shareholder.

It came as it emerged in company filings that Selfridges finance director, Matthew Smith, has stepped down after five years in the role.

He has taken up the same post at Inspired Education Group, the international private school company, following a career in retail.

Mr Smith has been replaced by Preetha McCann, a former partner at the accountancy giant EY. She has previously held senior finance roles at John Lewis, Heathrow, WH Smith and Tesco.

Central said on Tuesday it had gained control of the joint venture for the operating companies within Selfridges Group, which also includes its historic department stores.

A spokesman for Selfridges said: “Selfridges trades independently of any support from its shareholders.”

It will bring an end to weeks of concerns that a battle could be brewing for control of Selfridges.

The Austrian property giant has been struggling with a cash crunch in recent weeks. Earlier this month, it drafted in restructuring experts to try to save the business from collapse and Mr Benko was forced out by shareholders. 

Mr Benko, a high school drop-out who made his first billion before he turned 40, is responsible for having grown Signa over the past 20 years. He reportedly likes to joke that only the Catholic Church and the British monarch have property portfolios which match Signa’s.

Earlier this year, Mr Benko was estimated to have a personal fortune of around €6bn by Forbes.

He has been subject to scrutiny over bribery claims in recent years. Mr Benko has previously been convicted of bribery and was previously named by Austrian prosecutors as a suspect in a long-running political corruption investigation. He denied wrongdoing and was cleared by a court.

Industry sources told the Telegraph earlier this month that Selfridges could be among the first assets Signa could dispose of in a fire-sale, given its standing as a leading retailer in Britain. 

Signa previously attempted to sell the landmark Elbtower development in Hamburg to one of its shareholders, but the deal collapsed, escalating the crisis within the company.

A spokesman for Central Group: “This 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.” 

The deal means the Thai retailer will also gain control of other department stores including Brown Thomas & Arnotts in Ireland and De Bijenkorf in the Netherlands. 

It is also expected to help lessen fears over Selfridges’ debt pile which have been mounting over the past year.

In February, the Telegraph revealed that the joint owners had loaded the company up with even more debt after taking control in December 2021.

They had booked loans through new trading and operating companies, meaning Selfridges was facing a debt pile of more than £1.7bn. Two loans were secured against the freehold of Selfridges’ flagship London store, and against its Exchange Square site in Manchester.

A Selfridges spokesman said: “We welcome the stability of having Central Group as our majority shareholder, it demonstrates their ongoing and unwavering support of us.”

Selfridges has recently been battling to strip more costs out of its company, and in August unveiled plans for job cuts