The £4bn acquisition of Selfridges by Central Group raises questions about pricing.
- Tos Chirathivat admits the purchase price was high, especially with rising interest rates.
- Central Group was unaware of partner Signa Holding’s dealings with Saudi Arabia’s PIF.
- Despite challenges, Central Group plans to enhance Selfridges, focusing on Oxford Street flagship.
- Future improvements aim to position Selfridges among the top global luxury stores.
In an insightful admission, Tos Chirathivat, the executive chairman and CEO of Thailand’s Central Group, acknowledged that the £4bn acquisition of Selfridges and other European luxury department stores was overpriced. The deal, completed in 2021, was reconsidered in light of the current global financial climate, with rising interest rates playing a significant role. Chirathivat candidly shared with the Financial Times, “You would want the lowest price possible to buy something… is £4bn high? Yes, it’s high, especially in this environment.”
The acquisition, involving a partnership with Signa Holding, encountered unforeseen difficulties. Signa’s unexpected dealings with Saudi Arabia’s Public Investment Fund (PIF) led to a 40% increase in PIF’s stake in the retailer. This development was not communicated to Central Group until post-completion. Chirathivat expressed a lack of prior knowledge: “He only told us later when it was done… that he sold part of it to the PIF.”
Despite these setbacks, Central Group remains steadfast in its vision for Selfridges. There is a focused strategy on revitalising its Oxford Street flagship store, aiming to expand and introduce new products, services, and luxury brands. Chirathivat is confident in the potential of the store, noting, “We have three good floors [of six]… we are working to improve every area.” The overarching ambition is to transform Selfridges into the world’s leading department store, already considered among the top five.
André Maeder has been appointed as the new CEO of Selfridges Group to spearhead these changes. Chirathivat maintained an optimistic stance about the future, stating, “We can do a lot more.” This transformational journey indicates a commitment to enhance Selfridges’ market position and customer experience, solidifying its stature in luxury retail.
Central Group remains focused on overcoming challenges and enhancing Selfridges to secure its place among the world’s top luxury stores.
