Saudi Fund Invests in Retail Owner

Saudi Arabia’s public investment fund (PIF) is set to acquire a 40% share in the company that operates Brown Thomas and Arnotts. A deal has been agreed with Thailand’s Central Group, for joint ownership of the Selfridges Group, which is the parent company of these two Dublin department stores as well as Selfridges in London. The group runs a total of 18 department stores across the UK, Ireland, and Netherlands.

This arrangement follows the dissolution of the Central Group’s collaboration with Austrian businessman René Benko last year. Central Group took over his share in November after his firm, Signa Group, was subjected to a restructuring that eventually led to its downfall. This has dispelled any immediate uncertainty surrounding the business after Mr Benko’s venture failed.

The spokeswoman for Brown Thomas Arnotts confirmed that PIF will acquire a minority stake in the company together with Central Group, the majority shareholder, emphasising the vote of confidence this represents as it seeks to expand further internationally.

The PIF, among the largest sovereign wealth funds globally with assets estimated to be around $925 billion (€843.3 billion), has been one of the most visible investors over the past few years. It has played a role in diverse ventures, from the independent LIV golf tour to Riyadh Air, marking this as one of their initial significant investments directly linked with Ireland.

This agreement comes after what has been a robust trading year for Brown Thomas Arnotts, as revenues increased by 6% last year, with a record-breaking €337.3 million being achieved. However, non-cash finance and tax expenses associated with a sale-and-leaseback property transaction pushed the company into the red.

Recent financial documents for Brown Thomas Arnotts Ltd indicate that it netted €7.6 million in operating profits for the year ending February 3rd, 2024, an increase from €6.3 million the previous year.

In a recent announcement, the Public Investment Fund (PIF) mentioned its joint arrangement with Central Group, where they will correspondingly hold 40 per cent and 60 per cent stakes in both the operating and property undertakings of Selfridges Group. This contract involves fresh financing by both entities with a view to solidifying Selfridges Group’s standing and advancing prospective progress.

The PIF asserted that this alliance aligns with their investment strategy to tap into principal strategic sectors globally. By amalgamating PIF’s investing abilities with Central Group’s leading role in the industry, this collaboration aims to expedite Selfridges Group’s growth, thereby reinforcing its role as a dominant player in European luxury retail. This synergy underlies their mutual vision to uncover more potential in the Selfridges Group.

Condividi