Saudi Arabia’s Public Investment Fund (PIF) has acquired a 40% stake in Selfridges.
- The acquisition ends uncertainty following the collapse of Rene Benko’s Signa.
- Central Group retains a 60% majority ownership of Selfridges.
- The deal aligns with Saudi Arabia’s strategy to diversify away from oil dependency.
- New investments will focus on reducing Selfridges’ existing property-related debt.
Saudi Arabia’s Public Investment Fund (PIF) has strategically acquired a 40% stake in Selfridges, effectively ending months of uncertainty surrounding the luxury retailer. This move comes in the wake of the collapse of Signa, owned by Austrian billionaire Rene Benko, after it was embroiled in a fraud investigation. The acquisition ensures that Selfridges’ future will be anchored by substantial international investment.
Central Group, a family-owned retail conglomerate based in Thailand, continues to hold the majority stake at 60%. This partnership between PIF and Central Group reflects a powerful alliance in the retail sector. The collaboration is set to leverage Central Group’s luxury retail industry expertise with PIF’s global investment acumen.
With this acquisition, PIF elevates its share from a previous 10% stake, reinforcing its strategy to widen its economic interests beyond oil. Saudi Arabia’s sovereign wealth fund was responsible for more than a quarter of global sovereign wealth fund investments in the preceding year. This highlights Saudi Arabia’s commitment to diversifying its investment portfolio.
The potential for growth is emphasized by Ros Chirathivat, Central Group’s executive chairman, who lauds PIF’s investment track record. Chirathivat states, “PIF’s proven global track record of investments combined with our luxury retail industry expertise, brand management skills, and innovative approach, will allow Selfridges Group to continue to flourish.” Both entities are committed to new investments, primarily aimed at reducing the debt burden across Selfridges’ properties.
Despite experiencing a 30% increase in sales, Selfridges Retail Limited reported a £38m loss for the year ending January 2023. The recent injection of funds is expected to stabilize its financial standing and support its future growth. PIF’s deputy governor, Turqi Al-Nowaiser, underscores the promise of this partnership by acknowledging Selfridges’ potential as a premier retail destination.
Central Group’s increased control over Selfridges was achieved by converting a substantial €364m loan into equity prior to the PIF agreement, thus securing its dominant position in the property and operating businesses. This strategic move signifies a robust plan to drive Selfridges’ revival and continued development.
The alliance between Saudi Arabia’s PIF and Thailand’s Central Group promises to rejuvenate Selfridges, steering its trajectory towards a stable and prosperous future.
