Kering denies interest in buying Selfridges stake, Saudi fund stays tight-lipped on speculation

The problems at Signa could be a boon for Saudi Arabia’s sovereign wealth fund as it’s reportedly targeting a stake in Selfridges. But French giant Kering has said it’s not interested, despite a report that it was eyeing the business.

The Telegraph reported that the Gucci and Saint Laurent owner was among the big-hitters circling the luxury department store following co-owner Signa’s spectacular implosion.

But in a statement emailed to Bloomberg, a Kering spokesperson denied the group had any interest in the retailer.

However, none of the other parties involved have commented on the report. And Saudi Arabia’s Public Investment Fund (PIF) has certainly not ruled itself out. The newspaper had cited “City sources” for the report.

The collapse of Austria’s Signa has created the opportunity as it owns half of Selfridges’ property company. But those sources said the sale may be a drawn out one as “Selfridges is in play… [but] the sale process is complicated by proceedings in Austria”.

Regardless of complications, it’s believed that Thailand’s Central Group — the other co-owner of Selfridges — is seeking a new partner for the property business that owns the Selfridges retail brand and its Oxford Street, London, property.

The Saudi Arabian fund had been interested in the company when it was put up for sale by the Weston family two years ago. If it succeeds this time, it would mean a second Middle East sovereign wealth fund owning one of London’s prime luxury operations as Harrods is owned by the Qatar Investment Authority.

Saudi’s PIF has already been involved with the business as it provided finance for Signa’s investment. That could give it an advantage if a bidding war happens.

Had Kering also been interested, it would have seen a French luxury giant with very deep pockets going up against the equally-cash-rich Saudi operation.It’s currently unclear whether any other funds, investors or retailers might enter the fray.

The newspaper said that “a banker familiar with the matter” had pointed out that Central Group’s role will be crucial and that it could be the “kingmaker” in the sale process.

It’s likely that the full outcome of the collapse of Signa will be the trigger for bids, which could come in at about £2 billion.

Central and Signa bought the entire Selfridges business between them in 2021 in a deal worth £4 billion. But the business is split between the aforementioned property company and an operating company, which they both jointly owned. Central has since taken control of the operating company by converting a loan into equity, although Signa still owns around 35% of it. The two partners still have 50% each of the property company.