Saudi Arabia's Public Investment Fund set to take 40% stake in Selfridges

Sovereign wealth fund signed a binding agreement for a total buyout of the insolvent Signa Group’s position

Mannequins in the window of the Selfridges department store in Oxford Street, central London. Bloomberg

Saudi Arabia’s Public Investment Fund (PIF) has struck a deal to become a minority shareholder in the luxury British department store chain Selfridges.

The sovereign wealth fund has signed a binding agreement for a total buyout of the insolvent Signa Group’s position, which will give PIF a 40 per cent stake in both the properties and the operating businesses of Selfridges. Thai retail conglomerate and current co-owner Central Group will own a 60 per cent share of the business, with the deal including new investment from both shareholders to strengthen Selfridges’ financial position.

The terms of the deal were not disclosed. The tie-up follows the collapse of Central’s joint-venture partner Signa, the property and retail company founded by tycoon Rene Benko. Signa’s main property units are in insolvency processes in Austria after the rapid rise in interest rates tipped the heavily indebted group into insolvency late last year.

“We are pleased to be partnering with Central Group in Selfridges Group, one of Europe’s most iconic luxury department stores,” Turqi Al Nowaiser, deputy governor and head of international investments division at PIF, said in a statement. “This transaction allows Selfridges Group to build on its position as a premier retail destination.”

Selfridges is only one of Central’s joint ventures with Signa. The collapse of the Austrian-based group has led to an overhaul of several other investments. Central has moved to take over the operating companies of the Swiss luxury department store chain Globus as well as KaDeWe’s operating company and flagship store in Berlin.

The PIF already held a 10 per cent stake in Selfridges properties after a Signa unit syndicated out a portion of its 50 per cent stake to the fund. The Selfridges group operates 18 department stores in three countries, including Selfridges in the United Kingdom, De Bijenkorf in the Netherlands, and Brown Thomas and Arnotts in Ireland.

Selfridges was bought by Signa and Central in 2021 for £4 billon, with the business split between an operating company and a property company. Central moved to take control of the operating company when Signa began to hit financial difficulties last year, by converting a £317 million loan into a majority stake in Selfridges.

Selfridges was founded in 1908 by American Harry Gordon Selfridge, and its Oxford Street store has been at the heart of luxury retailing in London's West End for more than a century.

The PIF has several investments in the UK, including in Aston Martin and Newcastle United Football Club.