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One of Thailand's richest families believes it overpaid for its takeover of Selfridges and a handful of other luxury department stores in Europe as part of a £4bn deal in 2021.
Tos Chirathivat, executive chairman and CEO of family conglomerate Central Group, whose operations include retail, hospitality and real estate, told the Financial Times that the price was “high” in hindsight, given the increase in interest rates globally.
Speaking in his first interview since buying the department stores, he added: “You want the lowest possible price to buy something. . . Is £4 billion high? Yes, it's loud, especially in this environment.
He added: “Maybe 10 years from now it will not be so high, but if you ask today, of course it will be very high.”
The centrality that it has It sought to build a European luxury department store division Since acquiring luxury department store Rinascente in Italy in 2011, it has become the majority owner of loss-making Selfridges in the UK, De Bijenkorf in the Netherlands, and the Brown Thomas and Arnotts brands in Ireland.
It bought the portfolio including the world-famous department store Selfridges In 2021 from the billionaire Weston family With co-investor Signa Holding, making it only the fourth time the Oxford Street outlet has changed hands since it was founded by Harry Gordon Selfridge in 1909.
However, it has been far from simple sailing since then. Cigna, the real estate empire of real estate mogul Rene Benco, Break up At the end of last year, a collapse burdened investors in Austria and Germany with losses amounting to billions of euros. Last week Italian prosecutors He issued an arrest warrant Banko is amid an investigation into alleged irregularities at its businesses in the South Tyrol region.
In central October Make a deal With the Saudi Public Investment Fund to buy it, the Public Investment Fund is now expected to own 40 percent of the operating and real estate companies of the Selfridges group, while Central will own the remaining percentage upon completion.
There was “no problem” between Central and Signa during their years-long partnership — they began working together after Benco sold the majority of Germany's upscale department store Kaufhaus des Westens, or KaDeWe, to Central in 2015, Chirathivat said.
But before Cigna's collapse, Central began to worry about its debt levels.
Chirathivat added that Central had no knowledge that Banco had concluded a deal with the Public Investment Fund, meaning that the Saudi group had a stake of about 10 percent before agreeing its own deal with Central to increase this stake to 40 percent. “He only told us later when it was done… and that he sold part of it to the Public Investment Fund.”
Central has spent the past 18 months “trying to clean up (the mess) because our partner (is) no longer able to continue.”
Chirathivat, whose grandfather and father immigrated from mainland China and together founded the family business in 1947, has fond memories of visiting Selfridges as a child.
“Department stores have always been in our blood,” the 60-year-old said. Central is the largest department store operator in Thailand and billionaire Chirathivat's family is one of the richest families in the country. “Vacation also meant visiting shops, and my father would take me for walks and look in the windows every night, whether it was Saks Fifth Avenue, Selfridges or Harrods.”
He said after the Cigna disaster, Selfridges was now “on the right track” and “things are going well”.
Cambridge Retail Holdings, Selfridges Holdings, Recorded a pre-tax loss From £340 million in the 53 weeks to 3 February 2024, from £126 million in the same period the previous year, partly due to a higher finance bill and administrative costs, although revenues jumped 95 per cent to £1.6 billion. , from £1.6 billion. 804 million.
Central has appointed Andre Maeder, who previously ran KaDeWe, as group chief executive to steady the ship and focus on investing in the flagship store on Oxford Street, although neither Maeder nor Chirathivat said how much this would cost.
“The focus is on ‘rebuilding’ the (Selfridges) flagship store,” Chirathivat added. “We have three good floors (out of six)… We are working on improving all areas, be it new products, brands, services or food outlets.” And drinks.
He said Selfridges' “big plan” was to become “the best department store in the world”, admitting it was probably currently in the “top five”.
Maeder added that it has installed new makeup tables to enhance its beauty offerings, and major luxury brands have increased their floor space.
“I am happy because there is a lot of potential,” Chirativat said. “We can do a lot.”
