Owner of Brown Thomas and Arnotts put up for sale with €4.7bn price tag

The Weston family in Canada appoints Credit Suisse to oversee auction of Selfridges group

The Brown Thomas department store on Grafton Street in Dublin. Brown Thomas and fellow retailer company Arnotts are part of the Selfridges group, which has been put up for sale by the Weston family in Canada. Photograph: Gareth Chaney/Collins

The Brown Thomas department store on Grafton Street in Dublin. Brown Thomas and fellow retailer company Arnotts are part of the Selfridges group, which has been put up for sale by the Weston family in Canada. Photograph: Gareth Chaney/Collins

 

The family owners of Selfridges are kicking off an auction for the luxury department store, and have put a £4 billion €4.7 billion price tag on the business, which owns Brown Thomas and Arnotts in Ireland.

The Weston family, one of Canada’s richest families, first admitted that it might consider a sale of its European department store assets last month after an approach from a mystery buyer.

The approach came just weeks after the death of the 80-year-old head of the family, Galen Weston, who had spearheaded the purchase of Selfridges for £628 million in 2003. Mr Weston was married to Irishwoman Hilary Weston.

Now the family has appointed advisers from Credit Suisse to oversee an auction and intends to send out sale documents to an elite group of potential buyers in the next few weeks.

The assets up for grabs include Selfridges’ four stores in the UK – in London, Manchester and Birmingham – as well as Brown Thomas and Arnotts in Ireland and De Bijenkorf in the Netherlands.

A sale would be the latest chapter in an eventful history for Selfridges, which was opened in 1909 by the American entrepreneur Harry Gordon Selfridge. At one time the Oxford Street store housed more than 100 departments, including a shooting range and a library.

By the 1990s, it had become fusty and outdated, but was boldly revived by the Italian retail expert Vittorio Radice, a former boss of Habitat. Radice revamped the interiors, brought in more fashionable brands, and began staging events to draw in more shoppers. He also began Selfridges’ expansion outside London.

Selfridges, then listed on the London Stock Exchange, and was bought by the Westons shortly after Radice left for an unsuccessful stint at Marks & Spencer.

The family has continued to keep Selfridges at the forefront of retail, investing millions of pounds in the stores, putting on major events and developing upmarket restaurants, a cinema and even a skate bowl at the London branch to draw in visitors. The strategy boosted sales – in the year to February 2020 they rose by 7 per cent to £1.97billion, although profits slid 10 per cent to £88 million.

Industry watchers questioned why the family would put the department stores on the market during the pandemic, when both sales and profits would have taken a hit from the drop in tourist and commuters heading to city centre stores.

“All department stores are struggling with the internet. The only thing they really compete on is price. Selfridges is one of the best, but I wouldn’t buy it,” said one investor.

Weston family

Retail insiders said that Weston’s son, also called Galen, who heads up the family holding company Wittington Investments Ltd from Canada, and daughter Alannah, who is chair of Selfridges group, had not got the “conviction to carry on” with running the European department stores after a difficult 18 months.

While Selfridges is seen as a successful business that has turned itself into a destination for visitors from around the world, it is unlikely to have proved immune to shoppers’ changing habits. These have led to the demise of mid-market department store chains Debenhams and Beales and the closure of several John Lewis and House of Fraser outlets.

Its Oxford Street home has also suffered from a downturn in visitors, with numerous empty shops along its length, including the former flagship branches of Debenhams and Topshop. Marks & Spencer and John Lewis have both tabled plans to convert part of their stores on the street into office space.

Parties who may potentially be interested in Selfridges are thought likely to include Thailand’s Central Retail group, which already owns the upmarket department stores La Rinascente in Italy, Illum in Denmark and KaDeWe in Berlin, via a division run by former Selfridges boss Radice.

Other potential buyers could include HBC, the owner of Saks Fifth Avenue in the US, Hong Kong’s The Lane Crawford Joyce Group – where the current Selfridges boss, Andrew Keith, worked previously. Chinese-state backed businesses and Middle Eastern sovereign wealth fund such as the Qatar Investment Authority, which already own Harrods, have also been touted as likely buyers.

The Westons’ European department stores is thought to include about £2 billion of prime property assets including the freehold of the listed Oxford Street flagship store.

Galen and Alannah Weston are cousins of George Weston, the boss of Associated British Foods, which owns Dublin-headquartered Penneys/Primark, Twinings tea and Kingsmill bread.

However the ownership of Selfridges is separate from the British arm of the family, descended from Galen’s brother Garfield Weston, which owns a large stake in ABF as well as the Fortnum & Mason luxury food store and Heal’s furniture store.

It is hoped that a deal for Selfridges might be completed by the end of the year, although it is understood that the family may yet decide not to sell.

- Guardian Service