Selfridges co-owner admits £4bn price was ‘too high’

Tos Chirathivat, the executive chair and CEO of Thai family conglomerate Central Group, said in a conversation with The Financial Times that it may have overpaid for its acquisition of Selfridges and other European luxury department stores as part of a £4bn deal in 2021.  

According to Chirathivat, whose group’s operations span retail, hospitality and real estate, the price was “high” in hindsight when accounting for increased interest rates globally, making the original £4bn price tax less enticing. 

He told the FT in his first interview since the deal: “You would want the lowest price possible to buy something . . . is £4bn high? Yes, it’s high, especially in this environment. Maybe 10 years from now it won’t be too high, but if you ask today, then of course it’s too high.”

Central Group is currently the majority owner of Selfridges in the UK, De Bijenkorf in the Netherlands, and the Brown Thomas and Arnotts brands in Ireland. 

The £4bn deal was struck as Central Group had plans to grow its European luxury store division, following its 2011 acquisition of high-end department store Rinascente in Italy. 

Prior to Central Group, Selfridges was owned by the Weston family and co-investor Signa Holding. So far the department store has only changed hands four times since it was founded in 1909 by Harry Gordon Selfridge. 

However, after Central’s acquisition, Signa collapsed at the end of 2023, leaving investors in Austria and Germany with billions of euros in losses. 

Last week, Italian prosecutors also issued an arrest warrant for Signa founder René Benko following an investigation into alleged improprieties with his business in the South Tyrol region. 

Earlier in October 2024, Central Group struck a deal with Saudi Arabia’s Public Investment Fund (PIF) to buy Benko out. PIF is now expected to own 40% of Selfridges and Central the remainder once completed. 

While Chirathivat maintained that there had been “no issue” between his group and Signa during their years-long partnership, he did state that Central began to have concerns about its debt levels even before Signa’s collapse. 

Chirathivat added that Central had no knowledge of Benko subsequently doing a deal with the PIF, which meant the Saudi group had a stake of about 10% before agreeing its own deal with Central to increase this to 40%. 

Chirathivat added that his plan for Selfridges was to become “the best store in the world”, admitting that currently it is probably in the “top five”. 

Chirathivat added: “The focus is to ‘rebuild’ the [Selfridges flagship] store . . . We have three good floors [of six] . . . we are working to improve every area, whether it’s new products, brands, services, food and beverage outlets. 

Cambridge Retail Group Holding, Selfridges’ holding company, recorded a pre-tax loss of £340m in the year to 3 February 2024, from £126m in the same period a year earlier. This was partly attributed to a surge in its finance bill and administrative costs, although revenues jumped by 95% to £1.6bn, from £804mn.