The Westons are said to be seeking £4 billion for their European department store assets, including Selfridges’ four stores in the UK, Brown Thomas and Arnotts in Ireland, and De Bijenkorf in the Netherlands. Here is everything we know about the sale so far.
Who is Central Group?
Central Group is a Thai conglomerate owned by the Chirathivat family. Valued at more than US$12.9 billion, it has subsidiaries in multiple industries, including retail.
“Central Group is one of the ‘big three’ Thai retailers and shopping centre developers/operators. The other two being Siam Piwat and The Mall Group,” Michael Baker, a retail expert based in Bangkok and former head of research for International Council for Shopping Centers, told Inside Retail.
“Central’s superregional malls and department stores are ubiquitous in Thailand. It also operates specialty stores in multiple categories and owns department stores outside Thailand, including the KaDeWe in Berlin and the Rinascente chain in Italy.”
What does it mean for the future of Selfridges?
Central Group’s experience with the department store format, particularly with upscale department stores in Europe, such as La Rinascente, suggests it could be a good fit as the new owner of Selfridges.
“Central Group’s success in the European department store space should bode well for Selfridges,” Bradley Grinlinton, head of retail and consumer products at Publicis Sapient, told Inside Retail.
“They’ll be a proven set of hands who know the upmarket department store business well and can quickly leverage Selfridges’ native strengths in brand and location.
It also raises the possibility of international expansion.
“It could be a conduit for bringing the Selfridges brand to Asia but I don’t know if that is part of Central’s intent in buying it,” Baker said, though he wouldn’t advise it.
“It has been excruciatingly difficult for department stores to successfully expand internationally because their cache rarely seems to extend across borders.”
Selfridges was founded in 1908 by Gordon Selfridge. It was revitalised in the 1990s under the direction of Vittorio Radice, who now runs the Rinascente chain for Central Group, and was crowned Best Department Store in the World four times between 2010 and 2018.
Today, Selfridges is regarded as one of the best examples of experiential retail, offering highly creative and constantly changing store concepts and brand collaborations to drive foot traffic into stores. It has reported a sales increase every year for the last decade, reaching £1.97 billion (AU$3.72 billion) in sales in the year ending February 2, 2020, though this number likely plummeted during Covid.
Still, Grinlinton believes Selfridges is doing a lot of things right.
“Don’t change what isn’t broken – aka the brand and its range. Look at opportunities to build on these strengths in product curation and amplify in-store experiences (possibly using digital). Build on loyalty. But ultimately don’t change the brand’s DNA,” he said.
What does it say about the future of department stores?
The sale has been described by some sources as a once-in-a-generation opportunity, but given department stores’ shrinking share of the overall retail market, is it a good investment?
For Grinlinton, the deal proves that department stores still have a future – at least, some of them do.
“For department stores that have a differentiated brand or product proposition, there’s still plenty of legs left in the space. Selfridges are a destination retailer and tourist attraction on top of simply being a department store,” he pointed out.
However, Dr Seshan Ramaswami, a marketing professor at Singapore Management University, is less optimistic.
“The department store format as a one-stop shopping format for household semi-durable goods is in trouble across the world. Of all the retail formats, this is perhaps the most affected by internet commerce,” he told Inside Retail.
“At best, those retailers still operating in this format can attempt ‘clicks-and-mortar’ – seamlessly merging both an online and offline presence. They can source exclusive merchandise not available easily online. And they can focus on a high quality customer sensory experience in the store. But in the longer run, the format will likely fade away as it will be tough to sustain the high quality of experience and assortment while keeping prices low.”