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UK
Selfridges ownership battle threatened amid debt crisis at Austrian backer

Luke Barr
Sun, 5 November 2023 

selfridges department store

A battle for control of historic British department store Selfridges is brewing as the business empire of one of its major shareholders begins to rapidly unravel.

Speculation is mounting over whether Rene Benko’s Signa investment group will have to sell its 50pc stake in Selfridges in a bid to raise funds after it was hit by a cash crunch.

The financial crisis engulfing Signa, a retail and property investor, spiralled late last week when shareholders sought to remove Mr Benko and sent in restructuring specialists.


This is the latest hurdle for Mr Benko, who was previously named by Austrian prosecutors as a suspect in a long-running political corruption investigation. He denied wrongdoing and was cleared by a court.

After years of breakneck expansion Signa’s growth has been brought to a grinding halt by rising borrowing costs and falling property valuations.

As well as owning a 50pc stake in Selfridges, Signa’s €23bn (£20bn) empire also includes the Chrysler Building in New York and Berlin’s KaDeWe luxury department store. A bid to shore up the empire by selling the landmark Elbtower development in Hamburg to one of Signa’s own shareholders collapsed, escalating the crisis.

Signa shareholders sought to remove company founder Rene Benko late last week - ANTONIO BRONIC/REUTERS

Industry sources said Selfridges could be a priority in any potential firesale at Signa given its trophy asset status.

Selfridges was acquired in December 2021 as part of a joint £4bn deal by Thai retailer Central Group and Signa. The department store this weekend said the situation changed nothing for its trading or customers as it highlighted Central’s “unwavering” support.

The Telegraph revealed earlier this summer that Saudi Arabia served as a private financial backer in the takeover after teaming up with Signa.

At the time of the acquisition, Signa’s executive board chairman, Dieter Berninghaus, said he wanted to “fulfil the vision of the late Galen Weson” – who controlled Selfridges before his death.

Marcus How, head of analysis at Austrian consultancy group VE Insight, said: “I think at this stage, with different people running Signa, they are going to be trying to raise whatever money they can so I would imagine anything is fair game.

“It’s a reasonable assumption that its Selfridges stake could be sold.”

The impact of Signa’s struggles has already been felt in the UK after concerns were raised over Frasers’ bid to acquire one of its subsidiaries, SportScheck.

Mike Ashley’s business announced the intended acquisition of the 34-store retailer last month in a deal with Signa, which had agreed to continue financing the business until the deal was complete.

This has now been thrown into question and administrators could be called in as soon as Monday.

A deal between Signa and Mike Ashley’s Frasers Group for the SportScheck chain has been thrown into doubt - John Nguyen/JNVisuals

An Austrian business consultant who has scrutinised Benko and the Signa business in recent years said: “The company became more and more over leveraged while its valuation was being inflated. There has been very little room for manoeuvre for effectively what was a loss-making business and that has precipitated the fall.

“Fundamentally, he’s been losing credibility for a while. It only seemed like a matter of time before this was going to happen.”

Already, questions are being asked over whether potential bidders will soon start circling Signa’s lucrative stake in Selfridges.

John Peterson, an analyst at Peel Hunt, said: “Selfridges continues to thrive and from that point of view, it’s absolutely an attractive asset. You’d imagine it could be snapped by Middle Eastern or Chinese investors. There would be global interest.”

Saudi Arabia’s Public Investment Fund previously supported Signa’s successful Selfridges bid as part of a shopping spree intended to boost its clout on the international stage.

A Selfridges spokesman said: “This does not change anything for Selfridges. Selfridges trades independently of any support from its shareholders. We are delighted to have the ongoing and unwavering support of Central Group.

“We are very focused and excited by the Christmas period and welcoming our customers into our stores for an exceptional experience.”