The Austrian-based Signa Holding group and the Thai-based Central Group believe that the department store business has a future, especially in its premium segment and with a strong online component. The two family-owned groups announced on Dec. 23 that they have each acquired a 50 percent stake in the international Selfridges Group, stating that the transaction “will create one of the world’s leading omnichannel luxury department store groups,” adding to their other properties in the luxury department store business. The acquisition is reportedly valued at around £4 billion (€4.7bn-$5.4bn).
Including the iconic, 112-year-old Selfridges department store on London’s Oxford Street, the group being acquired from the Canadian-based Weston family comprises 18 department stores including three others under the same name in Birmingham and Manchester, the Arnotts department store in Dublin, six Brown Thomas stores in Ireland and de Bijenkorf with its seven stores in the Netherlands, plus some of the associated internet platforms and real estate. The business is said to be profitable. The Weston family will retain ownership of Holt Renfrew, a Canadian department store operation that is also part of the group.
Central, which controls nearly 3,700 stores, hotels, restaurants and buildings around the world, is a long-standing partner of the Signa group in the retail sector. In 2018, it invested in Signa Sports United, which has become the world’s largest online retailer for sporting goods and bicycles. SSU went public on the New York Stock Exchange on Dec. 15 with a valuation of over $3 billion.
In 2015, Central formed a partnership with Signa Holding to share ownership of the high-end KaDeWe department store group in Germany, which includes the KaDeWe store in Berlin, Alsterhaus in Hamburg and Oberpollinger in Munich. Signa, which had bought the three high-end stores from fledgling Karstadt group in the previous year, retained ownership of their real estate. At the beginning of 2020, the two investors again partnered for the takeover of Globus, a Swiss chain of 48 department stores, and formed a 50-50 joint venture, the European Luxury Department Store Group, combining Globus and KaDeWe with Italy’s La Rinascente and the Danish Illum department store, which had been previously acquired by Central.
The addition of Selfridges will push the combined pro-forma 2019 turnover of their joint European department store portfolio to a pre-pandemic level of about €5 billion. Signa and Central said they want it to increase to €7 billion by 2024 by means of “innovation know-how and knowledge-sharing across different locations.” The stores will be modernized to deliver a high-quality experience for their customers. The former Selfridges Hotel will be revived. The partners want to invest in sustainability and digitalization.
Separately, Signa has gradually taken over the Karstadt and Galeria Kaufhof department store operations in Germany and Inno in Belgium over the past few years, along with the Karstadt Sports and SportScheck chains of sporting goods stores. Central is not involved in these businesses.
