LONDON – It’s official. Selfridges is considering a sale and Credit Suisse advisers have sent a briefing note to potential investors, industry sources say.
The Times of London reported the news on Monday, following an earlier report in June that the company was considering a sale after being approached by a potential bidder with a bid of more than £ 4bn for its UK businesses , Irish and Dutch. It is understood that the Canadian company is not included.
The announced offer follows the death of Galen Weston at the age of 80 after a long illness. The late Weston had been the head of food, retail and real estate companies in North America, the UK and Europe. Among its holdings were Selfridges Group, comprising four stores in the UK; Brown Thomas and Arnotts in Ireland; De Bijenkorf in the Netherlands and Holt Renfrew in Canada.
Sources said sovereign wealth funds such as Abu Dhabi’s Adia, Saudi Arabia’s Public Investment Fund and Qatar Investment Authority, which already own Harrods, were interested bidders. Lane Crawford from Hong Kong is also seen as a potential buyer.
It is understood that two or three potential buyers had already expressed their interest, but no formal offer had been made.
George Wallace, CEO of MHE Retail, said £ 4bn is a steep price, but “as we saw when the Qataris bought Harrods a few years ago, wealth funds are willing to pay a price. bonus for trophies, and Selfridges is a rare gem.
“The company has a global audience and physical purchases are the key to the brand. This adds additional risk as the outlook for international travel remains uncertain. Customer traffic is low now, but I’m guessing there will eventually be a big bounce and crowds will return, however long it may take. It’s hard to say how long the process will last, but it won’t be a clearance sale, ”he added.
Guy Elliott, senior vice president of retail at Publicis Sapient, speculated that the Weston family “might not want to wait as long as recovery might take, because as glamorous as a Selfridges destination is, a store with such historic stature is not immune to changing consumer habits, and has experienced its most difficult year in its 113-year history due to the pandemic, or “perhaps the ownership icon that held such a special place in Galen Weston’s heart, with her passing, the group is looking to part with an aging and distressed asset.
The property for sale is estimated at only about half the price of £ 4 billion. Elliott said it would be wise to assume that the end buyer would seek to capitalize on their first brand, and that would end up being a “centerpiece” purchase rather than a purely financial investment.
He also pointed out that despite all the market interest and the auction process, the Weston family could still decide not to sell in the end. “How? ‘Or’ What [the second half of] 2021 in terms of recovery is likely to be the deciding factor, ”Elliott added.
As reported in May, the Weston family has seen their wealth increase from £ 470million to £ 11 billion in the past year, making them the 10th richest family in the UK, according to an annual ranking by the UK. Sunday Times London.
Although Selfridges has been affected by the lockdown and social distancing measures of COVID-19, it remains a forward-thinking retailer in London and a destination store, establishing a host of collaborations and new concepts.
During the lockdown last July, the store laid off 14% of its employees, or 450 jobs, and said it was preparing for tough times due to the impact of the lockdown closures.
At the time, the group’s chief executive, Anne Pitcher, predicted the recovery would be slow, with sales forecasts for 2020 “considerably lower” than in 2019.
She said the store needed to make “fundamental changes” and had looked at all aspects of the business: “our structures, our costs, our working methods – from top to bottom, leaving no stone unturned to ensure that we are fit for purpose and future.
Among the changes, Selfridges unveiled a bold look at its Birmingham, England store on Monday, with its curvy blue shape and large silver disc facade now covered in black and pink patterns designed by Osman Yousefzada.
The public art commission, titled “Infinity Pattern 1,” covers over 107,639 square feet and is a radical new landmark for the city.
It will be on full display until the end of the year and will be phased out next year while the store will undergo extensive renovations until next summer. It should be finished just before the Commonwealth Games.