Austria’s embattled Signa Holdings sells stake in Selfridges

Saudi Arabia’s Public Investment Fund is to take a 40% share in the iconic London department store in what will be Selfridges’ second change of ownership in two years.

Embattled Austrian property and retail giant Signa Holdings has sold its shares in the Selfridges Group to Saudi Arabia’s Public Investment Fund (PIF).

The multi-billion-euro deal is the latest in a series of sales by the company since it was declared insolvent in November 2023.

Previously led by Austrian tycoon René Benko, Signa collapsed with debts of around five billion euros.

The sale of its 40% stake in the Selfridges Group will see PIF join forces with Thailand’s Central Group to secure ownership of Selfridges, the iconic London department store.

Ireland’s Arnotts department store and the Brown Thomas department store chain, as well as the Dutch de Bijenkorf luxury department store group are included in the deal.

Owning Selfridges aligns with Saudi Arabia’s expansion plans

The Selfridges Group had been under the ownership of a consortium of Signa Holding and Thailand’s Central Group since 2022.

The consortium bought the company from the Canadian billionaire Weston family for a reported £4bn (£4.77bn).

John Collison, a retail analyst at the Foresight Group, sees the purchase by the PIF as part of a wider plan to strengthen its foothold in the global retail market and aligns with its efforts to attract luxury brands to Saudi Arabia.

“The Public Investment Fund’s stake in Selfridges is a testament to Saudi Arabia’s vision of becoming a key player in the luxury retail market.

“As the Kingdom continues to open up to global brands and tourism, acquiring such a stake in an iconic name like Selfridges makes strategic sense,” he said.

Saudi Arabia has big plans for the luxury retail sector

Experts believe that the PIF’s purchase of a stake in Selfridges could lead to major changes in the department store’s future strategy.

“We may well see Selfridges exploring new markets in the Gulf region, where demand for luxury goods is soaring, driven by high-net-worth individuals and increasing tourism,” said London Business School retail expert Maria Healy.

“Saudi Arabia, in particular, is building its credentials as a retail destination, with projects like the Red Sea International Airport and NEOM – the futuristic desert city being constructed in northwestern Saudi Arabia.”

New challenges in store

The PIF purchase is expected to bring new energy to the luxury department store model, which has been under pressure in recent years, due to shifts in consumer behaviour and the rise of e-commerce.

With PIF’s massive financial backing, Selfridges could potentially strengthen its digital presence and reimagine its physical retail spaces to appeal to new generations of shoppers.

“In many ways, this acquisition reflects a broader trend of luxury brands rethinking their strategy in response to changing consumer expectations,” said Emily Dawson, senior retail consultant at Bain & Company.

“Consumers today want an experience – something unique that goes beyond just buying a product.

“Selfridges has always been known for its experiential retail, and with the involvement of PIF, we might see the brand taking that even further, perhaps incorporating elements of Saudi culture or exploring innovations in retail technology,” she added.