A stake in Selfridges – the most iconic department store in the vast retail emporium of Oxford Street – is again up for grabs. It is the latest chapter in an ongoing financial crisis engulfing its Austrian co-proprietor Signa Group, the property empire built by self-made billionaire, René Benko.
The original deal for Selfridges dumped at least £1.7 billion in debt onto the group, which owns four UK department stores, as well as de Bijenkorf in the Netherlands and Brown Thomas and Arnotts in Ireland. Central is now looking for ways to take greater control of Selfridges: last year, it took majority ownership of the Selfridges operating company with a £317 million debt-for-equity deal which diluted Signa’s stake. It is reportedly in talks with several sovereign wealth funds (everyone’s favourite sugar daddy). Middle East and Chinese investors are reported to be interested, with the Public Investment Fund (PiF), Saudi Arabia’s sovereign wealth fund, said to be in the running. It has also been suggested that the Qatar Investment Authority is interested. Sovereign wealth funds like buying up trophy assets and, let’s face it, there’s fewer bigger trophies than Selfridges. But they should be careful what they wish for.
Selfridges, like many other businesses, was hit hard by the pandemic as travel restrictions reduced the number of foreign visitors coming to the UK. The scrapping of VAT-free shopping in 2021 also dented sales. Things have picked up recently, with a return of commuters and tourists to high streets. Even so, the retail sector is not the sure bet it once was and questions are growing about what the future holds for the big department stores.
It is all a world away from 1909, when the American entrepreneur Harry Gordon Selfridge opened his Oxford Street emporium. He had one intention: to found a great department store. Selfridges thrilled shoppers when it opened its doors: the first day drew enormous crowds, with live music and abundant floral displays. It even boasted a library for customers. Selfridge was determined his store would be a ‘a civic centre, where friends can meet and buying is only a secondary consideration’. Buying is, I would suggest, no longer a secondary consideration: it is the only consideration in today’s retail universe.
The store remains true to Selfridge’s original vision in continuing to sell a huge range of goods. It still tries to entice a sense of awe and wonder with its Christmas window displays and in-store entertainment. Yet the real game in town is to flog high-end and super-expensive fashion and beauty products, from the likes of Burberry to Hermes and Fendi. Shoppers – those with more money than sense – are welcome to splurge hundreds of pounds on boxes of chocolates. A designer hoodie or a pair of shorts might easily set you back by several hundred pounds. Most garish of all is the watch department, where a Rolex, new or pre-owned, can cost as much as the price of Angela Rayner’s old house in Stockport. Who is buying this stuff? We can guess.
The once world-famous food hall is nowadays nothing more than a mish-mash of ridiculously priced groceries. It’s hard to know who the target market is for this pap. The financial crisis enveloping the store has raised fresh questions over plans to overhaul the food hall, with no tangible progress since the plans were announced in August last year. This has been put down to the long-term nature of the project rather than any question over the ability to fund them. All in all, there is something oddly soulless about the flagship store, 500,000 square feet of floor upon floor packed with goodies that few people can afford and even fewer need. Happy days indeed.
The bigger question is whether any of this matters. After all, no one has to go into Selfridges if they don’t want to. It matters, only in that it tells us something about one more quintessentially British institution that has lost its way and at the mercy of overseas investors with deep pockets. Harrods is owned by the Qatar Investment Authority. Harvey Nichols, once Princess Diana’s favourite shopping haunt, is now in the hands of a Hong Kong luxury goods company. The financial crisis at Selfridges reveals a much bigger existential crisis: who and what are Britain’s once iconic department stores for?
Comments
Comments will appear under your real name unless you enter a display name in your account area. Further information can be found in our terms of use.