Kering among investors said to be eyeing Selfridges stake

The problems at Signa could be a boon for Kering or Saudi Arabia’s sovereign wealth fund as they’re reportedly both targeting a stake in Selfridges. 

The Telegraph reported that the French Gucci and Saint Laurent owner is among the big-hitters circling the luxury department store following co-owner Signa’s spectacular implosion.

Saudi Arabia’s Public Investment Fund (PIF) is also thought to be interested, the newspaper said, citing “City sources”. None of the parties involved have commented on the report.

The collapse of Austria’s Signa has created the opportunity as it owns half of Selfridges’ property company. But those sources said the sale may be a drawn out one as “Selfridges is in play… [but] the sale process is complicated by proceedings in Austria”.

Regardless of complications, it’s believed that Thailand’s Central Group — the other co-owner of Selfridges — is seeking a new partner for the property business that owns the Selfridges retail brand and its Oxford Street, London, property.

The Saudi Arabian fund had been interested in the company when it was put up for sale by the Weston family two years ago. If it succeeds this time, it would mean a second Middle East sovereign wealth fund owning one of London’s prime luxury operations as Harrods is owned by the Qatar Investment Authority.

Saudi’s PIF has already been involved with the business as it provided finance for Signa’s investment. That could give it an advantage if a bidding war happens.

But with Kering also reportedly interested, it won’t have the field to itself and the French luxury giant has very deep pockets. The business, which is listed on the Euronext Paris stock exchange, is worth €52 billion and as well as its two star brands also owns Balenciaga and Alexander McQueen, among others. It has a vast property empire including the 5th Avenue building where its New York Gucci flagship is housed. It bought the property for $963 million.

The newspaper said that “a banker familiar with the matter” had pointed out that Central Group’s role will be crucial and that it could be the “kingmaker” in the sale process.

It’s likely that the full outcome of the collapse of Signa will be the trigger for bids, which could come in at about £2 billion.

Central and Signa bought the entire Selfridges business between them in 2021 in a deal worth £4 billion. But the business is split between the aforementioned property company and an operating company, which they both jointly owned. Central has since taken control of the operating company by converting a loan into equity, although Signa still owns around 35% of it. The two partners still have 50% each of the property company.