Tos Chirathivat, the Executive Chairman and CEO of Central Group, which co-owns Selfridges, recently shared his reflections on the hefty £4 billion price paid for the iconic department store chain.
In a candid conversation with the Financial Times, he voiced reservations about whether this acquisition price, struck amid rising global interest rates, may have been too high.
Concerns Over Valuation
He remarked that ideally, acquiring any business should involve securing the best deal possible.
With the benefit of hindsight, he sees the £4 billion valuation as quite inflated in the current financial environment.
While Chirathivat believes that this figure might not seem so daunting in ten years, he admits it feels excessive at the moment.
Acquisition and Restructuring
The acquisition happened in 2022 when Central Group, in cooperation with Austrian real estate company Signa, purchased Selfridges from the Weston family, a wealthy Canadian dynasty.
Following the buyout, the new leadership restructured Selfridges into two separate entities: one focusing on operations and the other on property management.
However, challenges emerged.
In November 2023, Signa sought help from restructuring professionals to navigate financial difficulties triggered by spiraling borrowing costs and declining real estate values.
They enlisted insolvency expert Arndt Geiwitz to explore funding options.
Despite these hurdles, Central Group took a significant step in November 2023 by becoming the majority owner of Selfridges.
This shift occurred when the company transformed a loan from a subsidiary of Selfridges into equity, resulting in the withdrawal of voting rights from Signa’s chair and founder, René Benko, amidst escalating financial challenges.
Leadership Changes
In a statement, Central Group emphasized that this change reinforces their position as the leading owner-operator of Europe’s largest luxury department store chain.
They remain committed to delivering a remarkable array of brands and memorable experiences to their customers.
The new year brought more changes, as it was announced that Andrew Keith, who had served as CEO for almost four years, would step down.
His responsibilities will transition to André Maeder, the newly appointed CEO of Selfridges Group.
Maeder has been with the company since May 2023, preparing to take the helm.
Keith initially joined Selfridges as Managing Director in February 2021, advancing to CEO a year later.
Source: Cosmeticsbusiness