Uncertainty is looming over Selfridges’ future ownership as one of its co-owners, Signa Group, faces a financial crisis. Signa, in a joint venture with Thailand’s Central Group, purchased Selfridges for £4 billion earlier this year. However, the company is now facing a cash crunch situation due to rising borrowing costs and falling property values. This has resulted in the halting of construction on a €700 million project in Hamburg, and a deal to sell the project to a shareholder has fallen through.
In response to Signa’s financial difficulties, shareholders have sought to remove the company’s founder, Rene Benko, and have called in restructuring specialists. There are reports that Benko may potentially hand over control to restructuring expert Arndt Geiwitz to save the business, but this information has not been confirmed by either party.
The uncertain financial situation of Signa has raised concerns about the future of Selfridges. There is a possibility that Signa may sell its stake in the company, and if this were to happen, Central Group, the joint venture partner, could potentially buy Signa’s holding. It is also unclear whether Central Group might pursue further acquisitions of department store assets owned by Signa, such as Italy’s Rinascente and Germany’s KaDeWe.
Despite the uncertainty, Selfridges has reassured stakeholders that it operates independently and has the ongoing support of Central Group. The company emphasizes that business will carry on as usual. However, the future ownership of Selfridges remains uncertain, with potential interest from Middle Eastern or Chinese investors, including Saudi Arabia’s Public Investment Fund, which supported Signa’s bid for the company.
Signa’s financial problems have also raised concerns about the acquisition of Germany’s SportScheck by Frasers Group, which was announced last month. Signa’s own SportScheck chain is rumored to be on the verge of administration. With Signa expected to finance the chain until the completion of the deal, its cash problems and desire to preserve any remaining funds could pose a challenge. Frasers Group is set to complete the acquisition in January, leading to potentially significant financing needs in the coming months.
Reports suggest that SportScheck’s management may have to call in administrators as early as Monday. Frasers Group is currently exploring whether the deal can still be salvaged. Under Germany’s bankruptcy system, SportScheck’s management may seek support from Frasers Group to fund the administration, potentially resulting in an insolvent sale and Frasers gaining control of the company.
At this point, there have been no comments from Frasers Group or any official statements from the parties involved. The situation surrounding Signa’s financial troubles and its potential impact on Selfridges and the SportScheck deal remains uncertain and subject to speculation.
Useful Links:
1. Financial Times: Signa Group faces financial crisis
2. The Economic Times: Signa Group faces cash crunch
