Saudi wealth fund looks to up Selfridges stake to 50%

Saudi Arabia’s Public Investment Fund has reportedly made an offer to raise its stake in Selfridges from 10% to 50%, according to documents seen by Bloomberg News.The move comes after the department store’s co-owner Signa fell into insolvency earlier this year. The PIF currently owns a 10% share in the Selfridges properties and has reportedly offered to buy the remaining 40% stake for a cash price of $1.3m (£1m) from Signa’s flagship property unit, according to an insolvency report filed on 15 July. It was first reported that Saudi Arabia’s PIF was considering a stake in the group earlier this year, alongside Gucci owner Kering. It comes as the collapse of Austrian co-owner Signa left Thailand's Central Group searching for a new partner but any deal could be complicated by legal proceedings in Austria. It is thought that PIF could be in pole position due to its relationship to Signa having initially provided financing for its initial investment. It had also been reported that Central Group was interested in buying out Signa’s remaining stake in the department store chain with another partner. Central Group was said to be in talks with several sovereign wealth funds and tycoons about a potential partnership. Signa acquired Selfridges back in 2021 for £4bn but called in restructuring experts last November before filing for insolvency amid a cash crunch. Following Signa’s turmoil, Central moved to seize control of the operating business, converting a £317m loan into a majority stake in the retailer. Last year, the department store revealed that losses at the company narrowed to £38.3m, down from £83.9m the previous year, as consumers made more trips to the department stores. As a result, the company, which operates four stores in the UK and an online store, reported a 29% increase in revenues to £843.7m in the year to January 2023. The retailer attributed this “robust” growth to strong footfall across its physical locations, particularly at its Oxford Street flagship in London, as well as its Exchange Square location in Manchester. As the company’s net loss for the year narrowed, it benefited from an operating profit of £38.9m from a loss of £38.1m in 2022, according to documents filed with Companies House. The improved figures followed a hard period for the luxury retailer. Due to lockdown restrictions and temporary suspension of international travel, Selfridges had been unable to trade to affluent tourists visiting brick-and-mortar stores.