Saudi fund’s 40% stake offers new hope for Selfridges

The Selfridges shop on Oxford Street was bustling last Monday as shoppers flocked to the Telfar pop-up at the entrance, drawn by the season’s “it” brand showcasing its new bags, boots and jackets. A wheel of black leather totes spun from the ceiling while a DJ set the tone, creating the kind of spectacle that Selfridges is known for. Although customers were captivated by the display, however, little did they know that a big deal was being finalised behind the scenes to secure the future of the century-old department store.
On the same day Saudi Arabia’s sovereign wealth fund revealed that it had acquired a stake in Selfridges Group, putting an end to ownership concerns that have persisted for more than a year. The Saudi Public Investment Fund (PIF) said it had signed a deal to buy a 40 per cent stake in the retailer for an undisclosed sum, marking another move into high-profile British assets.
The stake had been owned by René Benko’s Signa Group, the Austrian property group that, along with the Thai conglomerate Central Group, bought Selfridges for £4 billion in 2021 from the Weston family. Central, which began modestly as a shop in Bangkok in the 1950s, founded by Tian Chirathivat, then took full control last year after Signa filed for bankruptcy in November, which cast doubt on Selfridges’ future.
The Saudi fund and Central, which owns the remaining 60 per cent of the Selfridges group, said the new partnership aimed to “accelerate growth” and was “underpinned by a shared vision to unlock further value in Selfridges”.
Selfridges was founded by Harry Gordon Selfridge, an American businessman, in 1909, when he invested £400,000 of his own money in opening a department store at the then-unfashionable west end of Oxford Street. It has grown to become a household name, known for putting on themed shopping events and creative displays, as well as offering fine dining and selling designer goods. It has been named the best department store in the world four times.
The late W Galen Weston acquired Selfridges in 2003. He formed Selfridges Group in 2010, with his other department store brands, including Brown Thomas and Arnotts in Ireland. Working closely with his daughter Alannah Weston and the leadership team, he invested heavily in his vision for a world-renowned group of luxury department stores.
The group was put up for sale in 2021 after W Galen Weston died. The Westons, one of Canada’s wealthiest families, still controls the Primark-owner Associated British Foods and Fortnum & Mason.
The ownership struggles at Selfridges will probably have come as a disappointment to the Weston family, who had emphasised the importance of selling to responsible owners that would honour their legacy of long-term stewardship.
Selfridges’ future was thrown into doubt amid the financial crisis that engulfed Signa, its heavily indebted former shareholder. It also emerged last year that the shop’s Thai and Austrian owners had booked loans through new trading and operating companies, loading Selfridges up with more than £1.7 billion of debt. This financial strain forced the company to implement redundancies in its head office and in some retail shops as part of an efficiency drive.
The value of Selfridges’ property portfolio was slashed by more than half a billion pounds last year. Accounts for Selfridges’ property holding company show that valuers marked down its £3.1 billion of property assets, which include its flagship Oxford Street shop, by £639 million, a fall of 21 per cent. More than £1.7 billion of loans, maturing in August 2025, are secured against Selfridges’ freehold property.
Selfridges has continued to outperform the market, despite a wider downturn in the department store and luxury sector. The retail analyst Richard Hyman said, however, that there had been a lack of direction since it was sold by the Weston family. “Clearly in the wake of the sale by the Westons there were a lot of changes at the top, and I think some of the direction has been lost. Real quality leadership is essential and I think that Selfridges has lost a bit of its vision and its purpose and its brilliant execution.”
There is due to be a further shake-up in the leadership team after Andrew Keith, Selfridges’ chief executive, announced his decision to exit the business in July. His role will now be overseen by André Maeder, formerly of the German department store KaDeWe, who joined in May this year.
The industry is hopeful that Selfridges’ wealthy new owners can help to reinvigorate it. PIF has about £550 billion of assets driven by Saudi Arabia’s oil wealth. These include an 8 per cent stake in Saudi Aramco, a fifth of Aston Martin, 3 per cent of Uber and 100 per cent of Newcastle United FC. It also has a stake in Heathrow.
The fund is controlled by Saudi Arabia’s crown prince, Mohammed bin Salman, whose government has been accused of numerous human rights violations. Critics have accused the government of using PIF to “sportswash” its human rights record.
Under Selfridges’ former ownership structure, Central and Signa were planning to open a luxury hotel as part of a revamp of its main shop. Part of it has been empty since 2008 when the old Selfridges Hotel was closed. The owners also wanted to upgrade the existing food hall and spoke of an overseas expansion. Those plans were seemingly put on pause, however, after Signa was declared bankrupt.
A source close to the situation said Selfridges’ owners continued to explore development opportunities. “Nothing has changed with the new ownership,” they said. “All of their significant plans they are continuing to look at.”
A Central spokeswoman said the companies were “considering different options” but would not comment further. She said there were no plans for new Selfridges outlets.
Hyman said the business should focus on “proper retailing” and forget about plans for the hotel and expanding: “It’s going to involve massive capital and really it’s got nothing to do with retail. They need to beware of the things that might take their eye off the ball.”
He added that the PIF, its new shareholder, would provide financial stability, but “you can’t really just throw money at stuff. Reinvigorating Selfridges is going to be a function of its leadership team. It has to be done in a planned, systematic way with a clear objective and carefully worked-out milestones designed to reach and achieve that objective.”
A Selfridges spokesman said it was “delighted to have [PIF’s] joint support, ensuring that Selfridges Group continues to thrive as a collection of world-leading omni-channel department stores.”