A significant shareholder of Selfridges has declared insolvency after struggling to secure additional funds, even after selling some of its stake in the department store.
Signa, an Austrian firm owned by Rene Benko, acknowledged its inability to obtain the “necessary liquidity” amidst “severe economic pressure,” despite extensive efforts in recent weeks.
The company acquired Selfridges as part of a joint venture last year, in a £4bn deal with Thailand’s Central Group, resulting in around £1.7bn in debt for the two firms.
Benko’s firm had joint control over Selfridges’ property and operating companies until recently, when Central Group gained majority ownership of the trading company earlier this month.
During the same period, shareholders removed Benko from his firm, and he is now in a battle to regain control of his £20bn empire, following several professional and personal setbacks, including a police raid on his offices in Austria. Benko has denied any wrongdoing and has not been charged.
Signa still holds a 50% stake in Selfridges’ property company, which includes the flagship Oxford Street store, and retains a minority stake in the Selfridges operating business.
Restructuring experts are expected to consider selling Signa’s stakes in an effort to recover from insolvency.
The ongoing situation of Selfridges has raised concerns about potential new ownership of the properties. A spokesman for Selfridges reassured the public that the support from Central Group remains strong and that the situation does not affect the normal operations and obligations of Selfridges. Additionally, a spokesman for Central Group emphasized their commitment to supporting their European luxury stores and mentioned their sound financial position and access to various funding sources.
Image Source: Chrispictures @ShutterStock