Galen Weston GETTY sub

Suitors Circling Selfridges Test Future of Post-Pandemic Retail


More than a year into the pandemic that’s dramatically changed consumer habits, one of the most prized retail assets in the U.K. is potentially coming up for sale, testing the appetite for physical outlets in an era of online shopping.

Selfridges & Co. Ltd., the luxury emporium best known for its giant department store on London’s Oxford Street, may be on the block with a 4 billion pound ($5.64 billion) price tag following an unsolicited approach, according to people familiar with the discussion. The current owner, the Canadian Weston family, has hired Credit Suisse to advise on the overture from an unidentified buyer, said the people, who asked not to be named because the deliberations aren’t yet public.

The department store is among the most famous in the world, eclipsed in London only by Harrods. While other brands have struggled or closed down entirely, Selfridges was able to withstand the downturn in recent years with its blend of cutting-edge fashion and a broad range — the shoe department is among the largest in the world and the rooftop terrace is a popular gourmet destination. A considerable part of the asset’s value lies in the real estate, which spans a large section of Oxford Street, London’s most popular shopping mile.

But the Weston clan also prides itself in its longterm approach to investments. Since gaining control of Selfridges 18 years ago, the family has invested heavily in the store. The store has outlets in Manchester and Birmingham, where Selfridges occupies a windowless space-age building vaguely reminiscent of a giant silver slug. Besides, the timing of a sale may not be ideal, said Peter Williams, the former chief executive officer of Selfridges who ran the business before the sale to the Westons.

“Oxford Street and Central London will be the last to recover from Covid because of the lack of tourists so why would you sell it now?” Williams said. “If I was in their shoes I would bat away any approach quickly as it can be a distraction and doesn’t help the running of the business. Particularly right now when everyone is working so hard to bring physical retail back to life.”

Spokesmen for Selfridges and Credit Suisse both declined to comment on the potential sale.

Expansion Drive

Founded in 1908 by Harry Gordon Selfridge, the retailer came under control of Canadian businessman Galen Weston in 2003 for almost 600 million pounds. The group has since expanded to other department store chains, including Arnotts and Brown Thomas in Ireland, Holt Renfrew in Canada and de Bijenkorf in the Netherlands. The holdings outside the U.K. and Ireland wouldn’t be included in the proposed sale, the people said.

Assessing the value of the real estate will be

Photographer: Stuart C. Wilson/Getty Images

a key part of any possible sale. A chance to own the 540,000 square foot (50,168 square meters) Beaux Arts store on Oxford Street is an attractive proposition. But it’s also become a location increasingly surrounded by vacant neighbors. Rival department stores on the U.K.’s busiest shopping street including Debenhams and House of Fraser have closed, while John Lewis is pursuing plans to convert part of its store into offices.

About 9.4% of retail space in London’s West End is now vacant, causing rents for the best central London stores to plunge by about 14% in the year through March, according to research published by U.K. property agent Savills Plc. Oxford Street rents are down almost 18% in the period, the broker’s data show. That’s hit investor demand for stores in London’s tourist heartlands, with deals in the first quarter down by almost 46% from a year earlier.

Active Owners



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *